A cannabis business accelerator, what’s next for Cresco’s Caltabiano, NIMBY for Naperville and Gold Coast dispensaries and more…
There’s an accelerator for everything, including cannabis entrepreneurs and startups
“It’s about providing opportunities that don’t exist in any other industry,” Gromentum executive director Amy Nathan explained to Canna Curious college students. [Photo: Brad Spirrison]
There are ten days left to apply for licences to grow, infuse or transport cannabis in Illinois in 2020.
If you’ve been thinking about throwing your hat in the ring but haven’t made much progress on your application, save your efforts for next year when additional licenses will become available.
I’m not trying to be a buzzkill, but when a state issues dozens of licenses, estimated by some industry insiders to be worth nearly $2 million before the first seed is planted, a cottage industry filled with opportunists, lawyers, investors and others quickly forms. It’s not uncommon for applicant groups to invest six-figures in legal and consulting fees just for a puncher’s chance of winning one.
Further, if your application doesn’t have majority representation from what the state defines as a “Social Equity Applicant” – an individual who was arrested or harmed as a result of previous drug laws – you have essentially no chance of winning a license. That is according to a cross section of lawyers, entrepreneurs and investors queried by Grown In who add that recruiting a social equity applicant is an an accepted and required element of admission.
Coalitions of social equity applicants, subject matter experts and investors that have won the lucrative licenses, interestingly enough, may or may not know the first thing about actually running a business.
Enter Gromentum Lab, an upstart Chicago-based business accelerator that plans to offer 16-week “mini-MBA” training courses and mentorship cohorts for cannabis entrepreneurs. Individuals who hold plant-touching licenses, as well as those seeking to create “ancillary” companies that provide technology, financial and other services specific to the cannabis industry are encouraged to apply.
Gromentum shares many attributes of accelerator programs like Techstars Chicago and the dozens of other local incubator-type entities that typically serve technology and life sciences-based industries. Advisor Tom Churchwell practically invented the concept in Chicago having spent years sharpening investor pitches to entrepreneurs who dared to present at his “Monday Morning Meetings.”
What makes Gromentum unique is how it addresses Illinois social equity provisions while aspiring for profits and optimal shareholder value.
“Ultimately it’s about transforming communities and providing opportunities that don’t exist in any other industry,” said founder and executive director Amy Nathan. A veteran executive for companies in regulated industries, including forming and running an anti-money laundering program for BMO Harris Bank 2014 to 2018, Nathan left the private sector a year ago to pursue an opportunity to provide access for local residents who don’t have many of the advantages she had – specifically, staying out of jail after being caught with possession as a teenager.
Responding to a question from the audience March 3 at the International Business Conference at Northeastern Illinois University about the ethics of working in the cannabis industry, Nathan shared her own story about getting busted smoking pot while in high school. While she was ultimately suspended from school, Nathan believes that if she were from a less privileged area and had darker skin, her life would be forever changed for the worse.
She was quick to acquire a skill-set that is now being incorporated into her new post.
Nathan started her career abroad in the early 90s as an associate for The Center for Arab-Jewish Economic Development, where she helped set up joint ventures in Israel between Jewish and Arab entrepreneurs.
“The common theme is economic liberation,” she said. “The premise of the work I was doing right after college is similar to the work I’m doing now. It just took me a couple decades to get back to it.”
Green in Chi attracts, educates cannabis industry newbies
Felicia Glasper, owner of in home cannabis catering company Hosted and Toasted, shares insight with leaf.trade co-founder Michael Piermont at Wednesday’s Grown in Chi. [Photo: Brad Spirrison]
A packed room at The Hubbard Inn in River North converged last night to network and learn from others who are establishing authority in the nascent cannabis industry at the monthly Green in Chi Event.
A mix of recent and aspiring immigrants to the industry exchanged business cards, LinkedIn accounts, origin stories and rationales for entering the industry.
Most were looking for a pathway into employment.
For the record, previous history with the plant is not a prerequisite.
“We looked initially for people who haven’t used cannabis, but if they take chances, are smart and are a little weird, we usually hire them, said panelist Michael Piedmont, co-founder of cannabis software company leaf.trade, which raised $4.5 million in part to expand workforce in Chicago.
Piedmont added that leaf.trade has commercial relationships with every Illinois-based dispensary.
While CBD snacks were passed around and the mild aroma of weed was apparent to the astute observer, most attendees were focused on how cannabis industries can advance their companies and careers.
It’s all about having the right balance, explained panelist Alan Bonsett, CEO at Boulder-based GrowRay Lighting Technologies.
“You want people who are passionate about cannabis, but if they are too passionate that can cause problems,” he said.
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Gold Coast and Naperville residents still iffy on pot shops
The Gold Coast Neighbors Association seems to be more interested in astroturf than natural grass.
Association president Vern Broders told the Chicago Sun-Times that he anticipates 50 concerned residents will show up at one of two public hearings this evening as representatives from PharmaCann and Cresco Labs share details of plans to open up dispensaries within the shadow of Viagra Triangle.
When and if residents approve one of four bids to open up shops in the area, only one location would be able to open in the foreseeable future. Currently, dispensaries in Chicago need to be located at least 1,500 feet from one another.
Meanwhile, the gloves are off in Naperville! A non-binding referendum on March 17 ballot will ask residents if they approve of recreational sales. Last September the Naperville city council voted to reject the possibility of recreational sales within city limits.
Mayor Steve Cherico supports recreational sales, which he estimates will bring $500,000 in annual tax revenue. Jennifer Taylor of Opt Out Naperville is disputing that prediction, telling John Williams of WGN Radio that this figure is derived from projections that are based on robust January 2020 sales. Citing statistics accumulated over five years in Colorado, Taylor believes recreational sales will be a fraction of what the mayor and industry advocates are saying they will be.
Residents will share their views on election day in March.
Cannabis Company Tracker: Cresco Labs, New Lake Capital, Jushi
Cresco president and co-founder Joe Caltabiano excited “about acquiring distressed assets” in the cannabis industry. [Photo: Cresco Labs]
Investment and business expansion news about cannabis companies doing business in Illinois.
Cresco co-founder Caltabiano eyes distressed assets
Joe Caltabiano, who co-founded Chicago-based Cresco Labs in 2013, tells Cannabis Business Times that he “will acquire distressed assets or be a part of rebuilding some distressed assets” within the cannabis industry after stepping down as president of the company effective immediately March 2.
Caltabiano, who will remain on Cresco’s board of directors, is one of a number of entrepreneurs and executives who built the first wave of commercial cannabis companies now looking to acquire assets for a fraction of what they were worth less than a year ago.
“You have a lot of companies with great licenses in various markets, good team members and good footing, but for one reason or another I don’t know that they survive in their current form without new leadership, new capital being injected or without a new vision or strategy for them going forward,” he said.
NewLake pays $6.2 million for PharmaCann dispensaries in Massachusetts, Pennsylvania
NewLake Capital, the cannabis real estate investment vehicle started by Green Thumb Industries Partners co-founder and former Pete Kadens and Avant founder and CEO Al Goldstein is investing $6.2 million in acquiring and upgrading dispensaries previously owned by Chicago-based PharmaCann.
As part of the sale and lease-back to PharmaCann, NewLake, which has invested approximately $100 million to date in cannabis assets amidst a distressed market environment, will acquire dispensaries currently operating in Massachusetts and Pennsylvania.
Privately-held PharmaCann, financially backed by Dan Tierney and Stephen Schuler of GETCO Trading, was to be acquired by Los Angeles-based MedMen last year for $680 million. The deal fell through in the fall amidst a massive market decline for publicly traded cannabis companies .
Jushi opens recreational dispensary near East St. Louis
Jushi, a Vancouver-based multi-state operator of cannabis dispensaries and cultivation facilities opened its first adult-use retail location in Illinois on March 2 in downstate Sauget.
The company has operated a separate medical dispensary in the community, a suburb of St. Louis. Jushi has municipal approval from the Normal municipality to open a recreational store, and is waiting on a green light from the state to add to its medical facility in the university town.
Roll Call: Scott Samuel, James Yi, Jessi Rae
Mini profiles of interesting cannabis industry notables and newsmakers in Illinois.
An early Internet pioneer, who Reid Hoffman credits with helping PayPal get off the ground, eyes cannabis – specifically the sale of pipes and related devices to discreet consumers over the web – as the next digital frontier. As co-founder and chief strategy officer of ShopHitly, a Chicago-based ecommerce platform set to debut later this year, Samuel is planning to attract 35-to-65 year-olds for whom stigma or professional reputation issues would not feel comfortable walking into a headshop. The founder of Honesty.com – which in 1998 was among the top the top 25 trafficked websites in the world – believes there is an opportunity to build a big, socially-minded enterprise before the Amazons of the world invariable jump in. Stay tuned.
In 2019, James Yi and partner Michael Piermont raised $4.5 million for their cannabis software company leaf.trade. Hyde Park Angels, an investor group comprised by University of Chicago alumni and stakeholders, led the investment round. The company plans to connect dispensaries with brands to optimize supply and demand. According to leaf.trade’s online origin story, the company concept emerged as Yi and Piermont observed dispensary professionals texting photos of suppliers of orders written on napkins.
As Eugene, Oregon-based chief operating officer of CannaConnections, Jessi Rae is co-hosting the 10th CannaGrow Expo in Chicago on April 17 and 18. This education and networking conference will focus on the “art and science” of growing cannabis and will include panel presentations and expert talks from leading local and national proprietors.