Cannabis Tech Incubator Works with Budding Entrepreneurs, Female Founders

By: Lee Rickwood

August 22, 2018

Grow the North or Weed the North. Plant the Seed and The New High.

Catchy, pun-laden names are all the rage these days as a result of the entrepreneurial developments aimed at the medicinal and recreational cannabis industry.

With legalization barely two months away for recreational usage, and with medicinal usage steadily climbing, Canada is poised for an explosion of small business launches and new service offerings to meet the expected high demand for cannabis and related products.

budding cannabis plant

Cannabis, aka marijuana among other names, has been around for ages. Creative Commons image.

Cannabis business services include product information and shopping tools for the consumer; cultivation solutions for the home grower; large-scale extraction and refinement services for licensed cultivators; ancillary products for both categories as well as financial and operational tools for cannabis business owners and managers. Technology needs in the industry include hardware (growth beds, lighting arrays, water systems, product dryers, sorters and packagers) as well as software (apps that offer inventory control tools to the cultivator, or product information and shopping choices to the consumer) and more.

Not surprising then that new business accelerators and tech incubators are targeting the cannabis space with training, mentoring and development programs designed to help Canadian companies succeed in the cannabis market.

trainees inside a crowded classroom

Canadian cannabis business accelerator Leaf Forward conducts training sessions in Toronto. Image from Leaf Forward.

Leaf Forward, calling itself Canada’s first cannabis business accelerator, is one such operation. With offices and activities across the country, it recently held a full day of intensive development sessions in Toronto, hosting two separate founders classes and engaging with twelve cannabis startup companies.

At the event, mentors from established cannabis industry companies, including CannaRoyalty Corp., provided guidance to the startup operators. CannaRoyalty is a large North American cannabis consumer product company that says it is focussed on building a leading distribution business in California, but it’s surely full speed ahead in the Great White North as well.

Saying how pleased his organization is to be a part of Leaf Forward, Michael Garbuz, Corporate Strategy and Legal Counsel at CannaRoyalty (and one of the Leaf Forward mentors), noted in a release that “CannaRoyalty’s participation in Leaf Forward provides us with an avenue to give back to entrepreneurs in this growing industry, while having a first look at developing cannabis businesses that may be a strategic fit with our portfolio of value-add cannabis businesses in Canada, the U.S. and globally.”

As “fully integrated, active investors and operators”, CannaRoyalty and other investors in the Leaf Forward Accelerator universe can invest as much as $50,000 in participating companies, as well as other training resources, in return for a six to 10 per cent equity stake in the startup.

What’s more, Leaf Forward has partnered with 48North Cannabis Corp, a female-focussed health and wellness cannabis company, in order to identify five female-run cannabis businesses and award them with scholarships to a Cannabis Startup Bootcamp.

The five 48North Scholarship recipients will learn strategies and tactics at Leaf Forward to help them start and grow a business in what is now a strictly regulated and what will be an increasingly competitive industry.

Competitive… and consolidating.

The great Canadian cannabis potential is, of course, attracting attention from M&A officers and investment specialists.

In one of the industry’s largest ever acquisitions, international alcohol and beverage company Constellation Brands wants to buy a 10 per cent stake in Canadian weed company Canopy Growth for $245 million. Beer and buds may be a great combination (buck-a-beer-and-a-joint, anyone?) but the deal may or may not go through. Nevertheless, it’s just one of a number of acquisitions and consolidations in the Canadian cannabis space that were already valued at $700 million more than a year ago.

smartphone held in hand

Aurora’s online medical marijuana delivery service is accessible to customers through a companion iOS and Android app.

Canopy itself provides investment funds and other resources to new market entrants through its own subsidiary, Canopy Rivers Corp., which continues to build a portfolio of investments.

Another Canadian cannabis company, Aurora (with its online medical marijuana delivery service accessible to customers through a companion iOS and Android app), has been in a strong M&A mode for some time now: it’s acquired a number of cannabis-related companies, including Peloton Pharmaceutical, Urban Cultivator, BC Northern Lights, CanniMed Therapeutics, and MedReleaf.

two young male cannabis company executives

Consolidation in the cannabis business: MariMed’s acquisition of iRollie turnkey solutions for brands and custom products. Founders Luke Shepter (left) and Joe Khoury (right) will join the MariMed team.

 

 

 

 

One of the founding session participants at Leaf Forward, a smoking accessories and related products company called iRollie, has already been acquired since the incubator launch: U.S.-based cannabis product provider MariMed acquired the Canadian start-up (and kept its executives) for some $600,000 in MariMed stock.

Even the scholarship partner at Leaf Forward, 48North, is involved in its own acquisition strategy.

So it’s clear that the opportunities for launch, growth and financial reward are many for Canadian cannabis companies – and that for many, exit strategies are just as important as entry points.

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UPDATE: The Ontario government has announced it has inked initial supply agreements with 26 licensed producers that will provide cannabis products to customers through an online goverment store, which will begin taking orders on October 17. Of the 25, there are large corporations and small craft suppliers. Canopy, mentioned above, is one of the 26.

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2 comments

  1. praftest123@gmail.com'
    Alice

    Nice post with will of great experience information. A successful Entrepreneur means he/she has built a organisation from scratch with seed up in a single mind idea. Thanks for this information.

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