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Kahner Global Cannabrunch: Plate Full of Investment Opportunities

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Photos and article by Michael Howard

The 4th annual Cannabrunch, put on by Kahner Global, kicked off with a private party in a swanky Beverly Hills home rented by Holonis (a group of social media influencers). This location made for a slightly bizarre evening as the first thing I noticed were influencers (who wouldn’t say their names or allow themselves to be photographed) wearing silk pajamas and a topless guy carrying around a bong and a small sack of nugs. These characters were flanked by security guards to ensure that photographs were not taken of them (and possibly to inflate their online personas and/or egos). This influencer circus (along with other, less camera shy influencers) was intermingled with ultra wealthy cannabis investors and CEOs of cannabis companies and cannabis investment funds. One could easily have had a dream that looked like this party, however, since I took photos, it actually happened. Or did it? Maybe my camera and iPhone were dreaming as well?

One sponsor of the evening’s festivities was Philter, a company with a cool new gadget which gets rid of the smell and the smoke of your exhaled hit (from a vape or a pipe, etc.). It’s about the size of an inhaler but you exhale into it and your smoke (or vape hit) literally goes in and doesn’t come out. Good for about 200 hits, Philter is aiming to sell their smoke disappearing contraption to the stealthy cannabis user who may wish to smoke at home, at work, or in virtually any public place (don’t even THINK about trying it on an airplane or you might wind up in serious trouble) where smoking or vaping cannabis is prohibited or frowned upon. Philter brought along a photo booth for people to take Philter photos.

A second sponsor was Quanta who were sampling their CBD infused creams as well as several delicious flavors of disposable CBD vape pens and were literally “the hit of the party.” They even brought purple couches from their office to set up kind of a lounge area in the well-manicured backyard with palm trees next to the pool with a float shaped like a giant pizza slice in it. One very nice touch was having two massage therapists with a table and massage chair set up to treat guests to back and neck massages (along with some ultrasonic healing device) as well as hand massages with CBD infused cream (which is all the rage these days) from Quanta. There was a full bar and light snacks were served as well.

The following morning was the actual Cannabrunch Investment Summit held at the beautiful and stylish Peninsula Hotel in Beverly Hills. Starting the morning off right with networking over coffee, tea, fresh squeezed orange juice and a delicious assortment of fruit, croissants and pastries, the weather was nearly perfect with sunshine and pleasant temperatures outside on the outdoor patio, adjacent to the conference room.

The conference room was packed with nearly 300 registered attendees, mostly investors.

Kicking off the conference with flair, JJ McKay, Founder & Publisher of The Fresh Toast, who was the MC for the event, made a point to mention that he is single and available, which was a pretty ballsy thing to announce in a room filled with mostly wealthy, middle-aged, white males.

The first panel covered the legal state of the cannabis industry, moderated by Matt Karnes, Founder and Managing Partner of GreenWave Advisors, LLC. Panelists discussed the current state of regulations in the US, what is being done to combat the illicit market. Alex Freedman, Deputy City Attorney, Los Angeles Department of Cannabis Regulation, admitted that it’s  challenging to permanently shut down illegal dispensaries because they just open up again in another nearby location, in some cases opening up directly across the street from legal dispensaries who are paying taxes and fees to be licensed, etc. Another topic of interest was when the US will legalize cannabis nationwide. Within 3-5 years was the general consensus.

The next panel was about specialty finance and debt alternatives. Rob Sechrist, President of Pelorus Equity Group, explained that it’s better to pay 25% to 50% interest on money borrowed for 12-18 months than to give up 10% of your company, which could eventually be worth hundreds of millions or more.

A fascinating panel about medical marijuana and research followed featuring Dr. Jeff Chen, M.D./MBA, and Director of UCLA Cannabis Research Initiative. Dr. Chen discussed the value of doing more research in order to get data which can clearly show that cannabis can help alleviate symptoms of various medical conditions such as epilepsy, arthritis and nausea. Dr. Chen is seeking funding for this research as the US government only funds research which is designed to prove the harmful effects of using cannabis. One of the other panelists, Roger Abramson, has donated generously to the UCLA Cannabis Research Initiative, according to Dr. Chen. Calum Hughes, CEO of Allied Corp, mentioned that their core mission is to help military veterans who are often prescribed opioids for pain management and then become addicted to this medication. Cannabis has helped people to get off of opioids but more research is needed in order to establish how effective cannabis can be in combating opioid addiction. Our nation’s veterans deserve the very best medical care we can provide to them, and they should all have legal access to whatever medicine they choose, including cannabis.

Following the medical research panel, Gene Simmons (born Chaim Weitz, in Israel), the bass player of KISS and a very successful serial entrepreneur, delivered a keynote which literally captivated the entire room. Wearing black leather pants and boots with dark sunglasses, Simmons had virtually everyone hanging on his every word. He matter of factly described how he had formed an opinion of cannabis users (stoners from high school, who he thought were losers) and held that viewpoint for decades. Surprisingly, he claimed that he never had any interest in or used drugs or alcohol, despite being a huge rock star for nearly the past 50 years. He started to pay closer attention to cannabis when his friend John Boehner got involved with Acreage Holdings and began lobbying for legalization. Simmons said that he now understands that cannabis is actually helping people with various medical conditions and in 2018 he became the Chief Evangelist Officer of Invictus, a cannabis company based in Canada. Regarding celebrity cannabis brands, Simmons explained, “Just because you know somebody’s name or face, doesn’t mean that they know what the fuck they are talking about.” When asked by an attendee what he felt about social equity, Simmons said, “If it’s a victimless crime, why are they in jail? Clearly if you can use cannabis today and not go to jail…before the law was passed, to the extent that it has…we’ve got to right the wrong…either it’s illegal or it’s not. Just because the law didn’t catch up with science, is the law’s fault…Yes, I would look seriously at releasing all sorts of people if that’s (using cannabis) the only thing they did wrong.”

Following a panel about the emergence of private equity and cannabis funds was a delicious, though a bit heavy on the meat, networking lunch. Another cup of coffee for a little jolt of energy for the afternoon sessions and we were ready to get back into the panels.

The first afternoon panel was about manufacturing and extraction. Featuring Dr. John MacKay, CTO of New Bridge Global Ventures, a highly regarded extraction expert and a Board Member of multiple cannabis companies, clearly edibles and other manufactured products using cannabis extracts are on the rise throughout all of the states which have legalized cannabis in the US. Extraction equipment manufacturers, might be worth taking a look at, from an investment perspective, as extraction equipment will be in high demand for decades as more states and countries legalize cannabis.

The following panel was about brands and the importance of creating a consistent, high quality and recognizable cannabis brand. The upshot is that there is still a lot of room for leading brands to be launched and the fight for shelf space in dispensaries will only continue to get more intense and costly for brands. Vertically integrated cannabis companies have a competitive advantage as they can choose to give as much shelf space as they want to their own brands.

Alex Fang, CEO of Sublime (a Gold Sponsor, and an award winning cannabis brand), took a deeper look at cannabis as an asset class and discussed where he sees potential pitfalls regarding investing in the cannabis space. Specifically, he mentioned three types of risk, political risk (coining the term “Jerseyed”), regulatory risk (including the effects of illicit cannabis activity), and market risk. He also graphically represented how young the cannabis industry and how few big players and established brands were in the space. Fang is also a Certified Financial Planner and his knowledge was quite impressive.

Following a networking break where I ate several, succulent, chocolate chip cookies (mmmm…chocolate…drool), there was a panel about technology in the cannabis space. Ultimately technology is improving cultivation, seed to sale tracking, payment systems, delivery, customer experience, and virtually every aspect of the cannabis industry. One advantage of investing in cannabis technology is that it’s federally legal and there are no additional taxes imposed upon technology companies, unlike cannabis companies which are plant touching such as cultivation, manufacturing, distribution and dispensaries.

The final panel of the day featured seasoned cannabis investors from Family Offices providing a candid look at the ups and downs of investing in the cannabis space. One key takeaway was that it’s important to develop relationships with both corporate CEOs and fellow investors. Sharing best practices and getting “pre vetted deal flow” is one of the main benefits of investing in a collaborative way with other Family Offices. Kai Nygard was refreshingly transparent when he told a story of how his family once made a cannabis investment which wasn’t properly vetted. Though at first there were some unforeseen challenges, that investment has now been creatively turned around and will ultimately become profitable after all. Lesson learned.

Last but not least, there was a pitch event featuring six companies, including one company  which may soon be emerging as a leader in the rapidly expanding CBD space. The winner of the pitch event was Dr. Mowgli Holmes, Co-Founder and CEO of Phylos, who has established “the world’s largest database of hemp and cannabis genetic insights featuring thousands of heritage and modern varieties from over 80 countries.”

Wrapping up the event and the day was a nice cocktail reception and networking finale with an assortment of cheeses and crackers and an open bar with delicious cabernet.

All in all, the Kahner Global Cannabrunch Investment Summit was well organized and curated, making for an outstanding cannabis investment conference.

Michael Howard is a freelance photojournalist, based in Los Angeles, who covers the cannabis industry, investing and entertainment. Michael also enjoys shaking his booty at Phish and other jamband concerts as well as playing percussion and composing music.

Michael Howard is a freelance photojournalist, based in Los Angeles, who covers the cannabis industry, investing and entertainment. Michael also enjoys shaking his booty at Phish and other jamband concerts as well as playing percussion and composing music.

Published: May 06, 2019

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