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The pitch that landed a marijuana entrepreneur $1 million in funding


truman bradley seed & smith marijuana

Truman
Bradley.

Courtesy of Truman
Bradley


Truman Bradley’s pitch for a new kind of cannabis company began
with a simple slogan. “It’s what’s on the inside that counts.”

Most companies that make marijuana vaporizer cartridges or
concentrates buy their source materials from farmers, slap their
sticker on the packaging, and ship it off to dispensaries.

The end user knows little about where their weed comes from or
its quality.

That didn’t sit right with the former business manager. “None of
the major companies were really providing their own source
material, and as a result, they were subject to the whims of
whatever they could get,” Bradley said. “So the quality was
fluctuating quite a bit.”

Bradley hatched an idea for a vertically integrated marijuana
concentrates and extracts company that grew its own materials.
Like a brewery, Seed & Smith would offer educational tours at
its facility so people could peel back the curtain on how their
products are made.

The Colorado-based Seed & Smith opens for business this
spring, after raising more than $1 million in funding from an
angel investor who asked to remain anonymous.


truman bradley seed & smith marijuana

Seed & Smith peels
back the curtain on how marijuana concentrates and extracts are
made.

Courtesy of Truman
Bradley


The grow room will have picture windows so visitors can peer
inside without contaminating the plants. Intercom systems will
allow tour groups to ask questions of the lab workers while they
trim buds or refine products in contained areas. There’s even a
museum-style exhibit on the extraction process and a gift shop
where the tour ends.

“This isn’t like Jurassic Park where you only see the
[dinosaurs] that make it, and the failures are on a different
island. We’re showing true production rooms,” Bradley told
Business Insider. “It takes a lot of guts to do that
, and
it takes a lot of money to design a facility that’s capable of
producing this stuff, day in and day out, on a high quality
scale.”


caliva marijuana dispensary 0731

A typical grow
room.

Melia Robinson/Business
Insider


Bradley said he met with 20 to 30 investors before finding the
right backer.

“Anytime investors hear cannabis, they think high risk and they
think high return — rightly or wrongly,” Bradley said. Marijuana
remains a Schedule 1 drug under federal law, and its legal status
is enough to scare away most banks and high net worth
individuals.

People who work in the cannabis industry are often forced to pay
interest rates north of 18% to 19% on a loan, according to
Bradley. Investors might ask for more equity than they would of a
business in a more mainstream category. Bradley says it makes it
hard to be successful.

His lawyer connected him with an interested party about two years
ago.


truman bradley seed & smith marijuana

This is not your average
marijuana production facility.

Courtesy of Truman Bradley

Seed & Smith won’t be the first vertically integrated
marijuana concentrates and extracts company. In San Francisco,
startups Bloom Farms and Lola Lola operate independent grow
facilities that supply oil for their vape cartridges, though they
also rely on third-party producers.

But Bradley’s pitch landed in part, he said, because he let the
investor have “complete visibility into what’s going on.” He even
encouraged the investor to visit other companies first.

“I wanted them to go tour a couple other production facilities
and then come see ours, because I thought that would give us an
advantage,” Bradley said. “Sometimes people wouldn’t recognize we
were a quality organization if they hadn’t seen what a lack of
quality looked like.”

Source

http://www.businessinsider.com/how-to-get-marijuana-startup-funding-2017-1