It’s tucked away on the second floor of a nondescript building in the heart of Boulder, above a bagel shop and a Dairy Queen. Most of the motorists passing by on the ever-busy 28th Street probably don’t notice it — and wouldn’t care about it if they did.
But Canopy Boulder is certainly getting noticed by cannabis start-ups looking for money to fund their new ventures. And by angel and venture investors looking for companies to put their money into.
In partnership with ArcView, the nation’s largest cannabis investment group, Canopy Boulder is a business accelerator that puts companies through an intense 13-week program designed to make them investment ready.
More than 100 companies applied to be in the first group of 10 companies to go through the program. The companies selected to be in that first group have just finished their training. The next group of 10, being selected from an equally big group of applicants, will begin their journey through the program this fall.
“I was studying the cannabis industry and trying to identify a way to connect entrepreneurs with investors,” Patrick Rea, co-founder and managing director of Canopy Boulder, said in an interview with SativaCOMM. “We saw a lot of entrepreneurs who were missing something in their business plans. They weren’t investment ready. On the other side of the fence we saw a large and growing number of investors who were very interested in investing in the cannabis space but weren’t seeing the kind of deals they wanted to see.”
Each company selected to participate receives $20,000 in seed capital so they can afford to spend the next 13 weeks focusing solely on honing their businesses. In return for the seed capital and 13 weeks of intense training, Canopy Boulder takes a 9.5 percent ownership stake in each of the companies. Canopy invests only in ancillary companies that provide products and services for the cannabis industry — not in companies that grow or sell cannabis itself.
“Our selection process is quite rigorous,” Rea said. “The first thing we do is look at the quality of the founders. We like to say we make our selection based on founder, founder, founder. At this early stage, it’s all about the person — the perseverance, the passion, the drive that’s going to make the business be successful.”
The three months are spent exposing the participants to key players in the cannabis industry, working to hone their businesses and, finally, preparing their pitches.
The pitches “are really about storytelling,” Rea said. “It’s a lot of work. You have to have a fantastic narrative that’s authentic and reflects the work you’ve done and the work you expect to do.”
“We drove from Massachusetts to Colorado to participate,” said Holly Alberti, CEO and Founder of Healthy Headie Lifestyle, one of the participating companies. “Canopy’s been an amazing experience.” She describes her company as “the Mary K of Mary J.” Her company brings its products to people’s homes where customers can learn how to use cannabis and buy pipes, vaporizers and other products (but not cannabis itself) in the privacy of their home.
“It was basically an MBA program in three months,” added Skip Stone, CEO and Founder of Stash Logix, which manufacturers discreet, lockable bags for storing cannabis.
“If I would have stayed back home in Israel, I don’t think I would have made anywhere near as much progress,” said Yoni Ofir, CEO and Founder of Leaf, a “plug-and-plant” system for growing cannabis plants at home.
How well is Canopy’s program working? Extremely well, it seems. Four of the seven companies selected to make investor pitches at the Rockies Venture Club’s annual Cannabis Capital Summit in June were Canopy Boulder participants. And eight of the 12 companies selected to make pitches the following week at an investor meeting sponsored by ArcView were also Canopy participants.
We all have stories to tell. Do you need help telling yours?