Episode 10 - Investing In The Cannabis Industry With Mina Mishrikey

Investing In The Cannabis Industry With Mina Mishrikey

This week Eric & Isaac are delighted to have Mina Mishrikey on the podcast.

Mina talks about new markets coming online, building operations in those markets from the ground up, the continued development of his portfolio, and in particular in the industrial hemp and biotech spaces.

Mina leads the Investment Team at Merida Capital Holdings, a private equity firm investing exclusively in the cannabis and hemp industries. In his role, Mina is responsible for deal sourcing, due diligence, portfolio analysis, and management and sits on the firm’s Investment Committee.

He serves on the board of several portfolio companies, including Henry’s Original, Canadian Rockies Hemp Corporation, Cellibre, Phylos Bioscience, and Pantry Food Co. Prior to joining Merida, he co-founded and served as CFO of Philagrow, a Pennsylvania-based medical marijuana company.

 

Transcription:

 

Investing In The Cannabis Industry With Mina Mishrikey

Isaac Bock:

This is the Roots to Risk Podcast hosted by Eric Schneider, alongside Isaac Bach. Roots To Risk brings you insights, the latest stories, and long form discussions about the cannabis industry. You’ll hear interviews with industry leaders and their perspective on current and future trends, how they’ve built success and what challenges they have faced. Our goal is to facilitate candid conversations and provide informative content for the cannabis community at large. Let’s go.

Eric Schneider:

How we going today? Isaac’s going on, man.

Mina Mishrikey:

Well, we both got the fresh cuts, so it’s, uh, you know, start to the, start to the spring. Really. You know,

Eric Schneider:

I, I feel like I lost my edge with, with my haircut. I feel like, I don’t know.

Mina Mishrikey:

No, you just got soft after you turned 30, so it’s all good. <laugh>.

Eric Schneider:

Oh, man. Well, another note, a happier note, we got a great guest lined up today, uh, meeting Maki from me, capital, uh, ib. You know, you and I have met Mina on the conference circuit, you know, and, and started to cult, cultivate a relationship, you know, through trailblazers, unsurprisingly. And, um, you know, what they’re doing in the space as a, as an investment fund, um, is, is definitely unique and, and excited to have him on here and, and really share their ethos, um, and, and what he’s excited about, you know, in the, in the future.

Mina Mishrikey:

Yeah, absolutely. I think he’ll probably provide some great insight, and I know, uh, they view investing in the industry as a whole and a little bit differently than some of our, you know, other guests who we’ve had on in the past. So excited to get his thoughts on everything as well.

Eric Schneider:

Yeah, absolutely. And, uh, and before we bring him in, just to give, uh, the viewers a little more context. So Mina leads the investment team at me Capital Holdings, uh, which is a private equity firm investing exclusively in the cannabis and hemp industries. In his role, Mina’s responsible for the deal sourcing, due diligence, portfolio analysis and management. And he also sits on the firm’s investment committee. He serves on the board of several portfolio companies, including Henry’s original Canadian, Rockies, hemp Corporation, de Libre, Filos Biosciences, and Pantry Food Co.

Eric Schneider:

Uh, prior to joining Merida, he co-founded and served as cfo, F O of fro, a Pennsylvania based medical marijuana company.

Mina Mishrikey:

Um, most importantly, he’s a fellow former Quake.

Eric Schneider:

I, I, I’m not gonna lie, I, I used to not be a huge fan of, uh, of the Ivy League. And, and now I would say if I was to go to an Ivy League school and do it all over again, I’d go to Penn. I

Mina Mishrikey:

Like you guys. That’s the only correct answer. So,

Eric Schneider:

<laugh>, well, let’s bring him in here and, uh, ex super excited about the conversation and, uh, another episode of Roots to Risk. Let’s do it. All right. What’s going on, Mina? How are we doing?

Mina Mishrikey:

I’m good. How are you?

Eric Schneider:

I’m good. I’m good. Appreciate you taking the time here and, um, you know, super excited to have you on, obviously, um, you know, would love to learn a little bit more about the work that, that you’re doing in the industry and, and your involvement in Merit Capital and, and what you’re doing on a daily basis. And, uh, yeah.

Speaker: 5:

Awesome. Well, happy to be here. Congrats on the new podcast. Uh, good to see, uh, an old friend and, uh, in a, in a little bit of a, a different context. Um, but you’re, you’re big time now, you know,

Eric Schneider:

Not big time, I think, I think, yeah, I don’t know about that. The amount of viewers we have are probably like on this right now, but, but hopefully we get, you know, get a little increase, a little bump. We’ll see.

Speaker: 5:

Okay. Well, um, yeah, I’m happy to talk about Marta. I mean, like, look, we’re building the industry together. Uh, we’re investors. Um, y you guys are a part of important part of the, the cannabis ecosystem. We’ve worked together in the past. And, um, you know, just to dive right into it, we’re, um, an investment fund. We, um, have launched, uh, I guess our fifth fund in six years. Um, all investing in the cannabis and hemp space.

Speaker: 5:

Um, right now, the industry is going through, uh, along with many growth-oriented industries, are going through, uh, you know, some difficult times in terms of the capital markets, in terms of, uh, the trickle down effects of, uh, you know, the, the Fed in, uh, increasing interest rates and, and what that means for appetite for growth industries. But for us, you know, we could be more excited about, uh, investing right now and investing in, in, in what we think will be, uh, explosive growth in the future.

Speaker: 5:

Um, and, you know, the tough times make, uh, uh, make or break, uh, the winners and, and we’re all in. So we’ve had a lot of success with our earlier funds. We’ve returned a lot of money and have, uh, done very well by our investors, uh, to date. Um, and, uh, I think that makes us somewhat unique in terms of returning, uh, multiples of invested cash to investors in this indu in this young industry. Um, but we, we invest differently.

Speaker: 5:

Um, and, you know, very not, not to, uh, uh, to tie it to you guys to alfa root. I mean, you know, you know this, uh, if you’re a commodity, um, and you can’t differentiate, uh, whether you’re an investor, whether you’re an operator, whether you’re a service provider, um, you’re not gonna succeed. Um, and so and so, you know, we think differently, um, as to you guys, you have a differentiated platform in a very competitive, commoditized insurance space.

Speaker: 5:

So, um, it, it’s, it’s, it’s led us to invest in areas that other people are investing in. Um, and we’re excited about some of these areas, which I’m happy to dive into and talk about as the, the dialogue, uh, evolves. But happy to be here and, and happy to talk more about, about what we’re looking at

Mina Mishrikey:

Now. We, we love, we’re glad that you’re, uh, you’re on with us as well. But yeah, we’d love to hear about some of the, the differentiators in terms of the industries you guys are looking into. Um, you know, I, I know a few based off of, uh, some mutual friends in the, in the community, but we’d love to hear about some of the companies you guys are looking at right now.

Speaker: 5:

Um, I guess I’ll start by, you know, talking a little bit about what is a core theme for us, and that’s to act less like an investor and act more like an operator. And, uh, and basically, uh, as new states come online with medical programs, which we’ve always been very medical oriented and focused, uh, which certainly differentiates us because a lot of people focus on bigger adult use markets, but we, we, we, we like the medical markets for, for many reasons, but building, uh, uh, operations from scratch as states come online, uh, you know, we’ve always been very focused on, on state by state new markets, applying for de novo licenses with local partners, with social equity partners, um, winning or losing those licenses if we win those licenses.

Speaker: 5:

Or if, you know, maybe we’re investing early in the life cycle of an operator that has a license.

Speaker: 5:

Um, really having the wherewithal in-house to have partners that, uh, know how to build a cultivation facility at meda. Um, you know, we’re not, you know, we’re not just an investment shop where we have an operating group within MEDA that, you know, built, has built a dozen cultivation facilities from scratch, uh, processing facilities, dispensaries, brands, products, and building those up and getting those businesses cash flowing, uh, in a very short period of time in a young new market.

Speaker: 5:

Um, and, uh, and, and monetizing those assets. And, and when we’ve had success over and over again doing that, we’ve, um, we have, uh, we, we invest in private companies, in young private companies, um, and we have public MSOs in our portfolio. Only by virtue of the fact that we’ve sold some of those operations that we’ve built is some of the bigger MSOs. And, and so we’re, we’re, uh, the theos that, that we have in our portfolio are largely gti, cresco, and, uh, as their stock prices have suffered in this market, we’re really comfortable holding them for the long run because they’re the best of the, uh, you know, the best and brightest of the MSO class.

Speaker: 5:

And we all know where this industry is going. It’s a re regulatory capture play. You know, at some point the federal government will come to their senses and, you know, we have a long enough time horizon with our investors that we’re happy to, uh, have partners in those MSOs. But it originates from building from scratch some of these state-based, uh, opportunities. And right now, uh, we’re very busy on that state-based front, uh, we’re building our cultivation facility in Connecticut.

Speaker: 5:

Uh, we’ll hopefully have the first adult use flower, uh, uh, that is not a, a legacy medical operator in Connecticut. Uh, uh, later this year, um, we have a, now a New York Medical Vertical license, which is somewhat unique and a long story. Um, we’re building an operation in a new Latin American market, uh, uh, which, uh, is gonna be very interesting cuz it’s a medical program that’s socialized.

Speaker: 5:

So insurance reimbursement is something we think about a lot. So that’s number one is sort of our state-based operation focus, and that’s sort of the biggest theme that we have as a fund. Um, some other themes that we really, uh, invest heavily in that we, we don’t see a lot of peers in our space investing in our, certainly the industrial applications of hemp fibers. We are never big in the CBD world. Um, but we like the trash that the CBD players, uh, you know, uh, uh, dispose of, which is the fiber, the stems of the plants, and using that for sustainable uses.

Speaker: 5:

And that’s something that I’m, you know, I run our investment team, but, uh, one of my core focuses is that area specifically. So, um, you know, I just love the promise of cannabis being not only, you know, a great, uh, healthier vice for people that are healthy, not only medicine for people that are sick, but the promise that this industry has a massive sustainability solution, um, for, you know, a a world that is, uh, that needs sustainability solutions.

Speaker: 5:

You know, the industry is, you know, with, with, with the advent of a lot of indoor agriculture, indoor grows, there’s a lot of unsustainable aspects to our industry, but we’re literally sitting on a plant that VAC is a vacuum cleaner for carbon, uh, in the hemp plant, and, um, has a myriad of sustainable uses, whether it’s into the automotive industry, whether it’s into textiles, into construction, into paper and pulp. I could go on and on.

Speaker: 5:

And, uh, it’s just an, it is just an, an amazing promise for markets that are much, much bigger than the total addressable market. As we say in finance, the total addressable market of, of people getting high is much smaller than the total addressable market of construction, automotive, textiles, et cetera. Um, and there’s amazing companies that we’re building inc in that industry. And it’s, you know, not too dissimilar from cannabis and that it’s young, it’s early, it’s got its own challenges, but, um, but that’s another area that we’re really focused on.

Speaker: 5:

And then a couple other quick ones, cuz I’ve been talking too long. <laugh>, um, we’re very focused on biotech applications. You gotta hear

Eric Schneider:

From you Mina than us,

Speaker: 5:

So keep Yeah. But this, for sure, this is great. It doesn’t make for fu it doesn’t make for a Fox podcast, but it’s all good. It’s, uh, but, uh, uh, biotech applications, whether it’s genetics, um, we’re very much, you know, kind of supply chain focused, platform focused as opposed to kind of end brand focused. We do obviously invest in end brands that have niches, but, um, but we’re much less focused on that than we are supply chain. And so genetics is a big area of focus of ours. Um, as well as, and it kind of ties into the sustainability, uh, uh, theme.

Speaker: 5:

Um, we have a, uh, a biotech platform out of, uh, San Diego that’s focused on creating cannabinoids in the science lab as opposed to extracting it from a plant. And why that’s interesting to us is in a post legalized world, when say the Coca-Colas come into the market with a sleepy time Coca-Cola drink using cannabinoids, they’re not gonna be sourcing their cannabinoids from a plant.

Speaker: 5:

They’re chemical companies and they’re gonna be sourcing them otherwise. And so it’s not, um, tip of smirch the plant. We love. The plant plant isn’t going anywhere, but, uh, that’s an interesting angle is the larger ingredient space as well as the API space for pharmaceuticals. Um, and there’s a lot of, obviously sustainability aspects to that because, um, you know, it, it certainly puts less pressure on the environment if you’re just, uh, um, growing cannabinoids in a, in a, in a Petri dish. Um, and then the last area of focus of ours on more on the kind of the tech side, we’re not as tech oriented as some, but, um, on the tech side, uh, advertising technology, uh, is something that we’re really excited about, especially in a world where the Facebooks and the Googles, they can’t really service the industry.

Speaker: 5:

Um, but at some point they will, and at some point they’re gonna want, um, relationships and data.

Speaker: 5:

And that’s what we’re building in the cannabis space, um, with an eye to partnering with the Googles and the Facebooks of the world as they come into this space and now Twitter. Um, and so that’s an area where we see a real opportunity, especially when you consider the fact that most brands are disintermediated from their consumer, um, by the retailer. And, and, and having a closer relationship with the consumer is really gonna help brands in this space thrive. And we’re trying to solve that problem.

Speaker: 5:

So those are, you know, the state-based operations, the industrial applications on the hemp side, um, the, uh, biotechnology applications and, and and finally advertising technology. Those are pretty big themes of ours. Um, and I think are, you know, somewhat unique in, in this space. Some, some of our fellow investors shunned the single state operator model. Uh, uh, most people aren’t looking at it. The industrial applications, biotech is always a little bit scary, um, because, you know, it’s a, you know, glorified science project, but we’re long term investors and, you know, when we find something that is disruptive, we, we lean in.

Eric Schneider:

That’s awesome. Um, and, and I think something that’s really unique about what you do is at, at Marita is like, based off our conversations in other portfolio companies, like within the, the merit ecosystem is how much of a partner you really are, right? And having that like, expertise on not only looking at the financial health of a company, their balance sheet, when you’re looking at an investment and, and helping those clients grow, but like actually optimizing their, their cultivation or, you know, parts of their business that another investor may say, Hey, here, talk to, to this person, this outside consultant that we have.

Eric Schneider:

You have that knowledge in-house, which I think is, is really unique and, and allowed you to have success. And, and like you said, right, you know, you have capital, but what differentiates that capital from, from another fund? And it, and it’s those outside, um, details that are, that I think are super important, um, and, and commend you guys for doing that.

Eric Schneider:

The, the one question that I had is just like a, as a follow up. Cause I think the industrial hemp space is, is super fascinating and it, it seems like there’s so many points as to like, why is this not more mainstream already? Right? You think of like, you look at like hemp concrete and, and all of these different applications, but it just doesn’t seem like it’s, it’s really present, right? I think when we think of like the cannabis industry, everybody goes to medical use, recreational use, like, you know, for, for consumption, not, you know, truly on the, the commercial use side.

Eric Schneider:

What, what are some barriers there that you’re seeing, you know, for, for it not being more mainstream? Is it existing companies that are, are trying to, to keep their foothold and, and, um, or is it supply chain issues? Like, like what, what are you seeing as to the, the main components for it not being more present right now?

Speaker: 5:

That’s a great question. So the, it’s just an early industry. Yeah. Um, you know, the 2018 farm bill is really what ushered in the, okay, now we can play with this plant all of a sudden, um, and everyone focused on cbd and we went right to, um, you know, the industrial applications are gonna be a much bigger opportunity. Um, and right now the supply demand dynamics, um, are quite the opposite of what we see in certain cannabis markets, like say, Michigan or California, where there’s too much supply.

Speaker: 5:

Um, especially when you couple that with the illicit market. Um, and there’s only so much demand, uh, in the industrial space. It’s the opposite. There’s no supply and there’s insatiable demand, and that demand will accelerate over time because there are the, uh, Ford motor companies and the cargos, um, and the Patagonias and the Nikes of the world that are saying, wow, we really wanna play with this.

Speaker: 5:

But you need to build your supply chain up so that you can feed us an adequate amount of supply, uh, you know, in, in the near future. Uh, because right now, you know, the supply chain is just not built and, and ready for, uh, the big boys. So what we think is going to happen is you’re gonna have in, you’re gonna have any, anything in the cannabis space is dealing with a plant. A plant is ultimately a commodity. Um, at some point the markets will mature and they will commoditize, but for the foreseeable future on the industrial side, you’re just gonna have very high demand that is only gonna accelerate over time as the supply chain is built and only so much supply.

Speaker: 5:

Um, and so that’s very exciting for us. The real bottleneck in the space right now is there are not enough hemp processors that are quote unquote online, meaning farmers grow hemp, they bail them up, looks like bales of hay, and then you send them to a processor or a decorticator who will separate the hemp into its constituent parts, really, because that hemp empty corion processing business is so capital intensive.

Speaker: 5:

Um, it takes time to build those up. And so 2018 Farm Bill, um, some of these businesses were ideas in 2019, 2020, we started investing in 2019, 2020, and it’s taken us two or three years to get to the point where now we’re ready to be in business. Um, and so what you’re seeing right now is a bunch of these processors that are coming online, there’s only, you know, maybe a dozen in North America that are, you know, worth, um, uh, recognizing and, and it’s a regional supply chain business. You gotta be within a hundred miles of your farmers.

Speaker: 5:

And then once it’s processed, you can ship that fiber overseas. And in fact, our processing portfolio company is shipping to places like China and, and Europe. Um, and so, um, it’s just early. It’s just, that’s it. Um, it’s all coming. It’s out in front of us.

Speaker: 5:

And in fact, we at Marta, um, are actually a sub-advisor, uh, for another fund that’s not marta, but that’s called Replant Impact Fund. Um, it’s run by, uh, a guy named Jeff Whaling, who’s the head of the National Hemp Association. And that fund’s sole purpose is to invest a hundred percent of their money in the industrial applications of hemp fibers. Um, so, you know, really it’s just, it’s just, it’s early. And then the other thing worth mentioning is you can create an al uh, uh, you know, we have a portfolio company that creates non-woven fabrics using hemp fibers.

Speaker: 5:

So, you know, non-woven fabrics are like wet wipes diapers or feminine hygiene products. All of those products, you use them once and you throw them away. Like they’re literally single use items and they’re made out of 90% of the materials of those products are petroleum based synthetic plastic materials.

Speaker: 5:

So this company is using hemp to make a compostable version of all those that works better, actually. Um, and it’s a great product, and ultimately, you know, consumers are only gonna buy that product if the price is comparable with the non-sustainable alternative, if it costs twice as much, it doesn’t matter how sustainable it’s, yeah. And so it’s gonna take time to build this supply chain to the point where you can bring that price compression down and you have, um, something that is competitive in the market.

Speaker: 5:

In this case, the company has found immediate product market fit, um, because, you know, they’ve been able to bring their prices down to the point, even though it’s early stage where it’s competitive with the non-sustainable alternatives. So it’s just interesting to see, um, how, how these are, these, these areas are, are, are developing, but we’re, um, um, we couldn’t be more excited about, about the space. And again, I, I encourage other investors to really start paying attention to the visits.

Speaker: 5:

Uh,

Eric Schneider:

Yeah. And I mean, the space, you know, it doesn’t have the, the confines of interstate commerce too, right? Like you can, you know, if you have a product with market fit, it, I, I feel like sometimes, and again, we’re not on the, the operator side by any means, but it’s really hard to build a brand when you’re relying on different suppliers and supply chain in every state, right? If you’re, if you’re trying to build a national brand, it’s, it’s really challenging, right? Um, and, and hemp, if you can have a sole location like you’d mentioned and be able to use that as a hub and, and ship from there, I mean, that’s a huge advantage, right?

Eric Schneider:

Over, you know, what we always gravitate towards is the, you know, the traditional cannabis market with either recreational or, or medical use. Um, so I think, I think that’s like a, a great opportunity. And like you said, you know, there’s, there’s a global demand for it as well, which is, um, super exciting.

Speaker: 5:

Yeah, it certainly has, uh, significantly less regulatory cha challenges than, than kind of the THC cannabis side of things. That being said, it’s not, uh, you know, it’s not easy. Um, right now we’re lobbying in the 2023 farm bill for a hemp, uh, exemption for industrial applications. Um, because right now, you know, you still have to test your, you know, your hemp fibers for THC levels, even though, you know, nobody’s consuming it.

Speaker: 5:

It’s going into a car door, um, which doesn’t make any sense. Zero.

Eric Schneider:

Unless, unless, unless someone’s, you know, really desperate and, uh, and gonna turn to their car door to, uh, yeah. Yeah. I, I don’t know, <laugh>,

Speaker: 5:

It’s, uh, it’s, uh, you know, it’s a frustrating, but, you know, I’m, you know, on the regulatory front, we don’t make guesses as to kind of what the federal government’s gonna do. The Democrats certainly screwed up the last two years for the industry. Um, and that’s not making a political statement. I’m generally a, you know, left of center person, but, um, but I do have, that’s the facts.

Speaker: 5:

Yeah. But I do have some, uh, optimism that, uh, that actually, uh, something will happen before the next presidential cycle. And one interesting, um, um, uh, event that, uh, happened this week is Kentucky is now moving towards a medical cannabis program. And, uh, that to me, I find very, very interesting, especially since a lot of the pushback has come from the leaders of, uh, the, uh, of congress in, in Kentucky, not to name of their names, <laugh>.

Speaker: 5:

Um, and, you know, it’ll be interesting to see if, if Republicans, you know, decide, let’s take this issue on because there is a lot of bipartisan support, and let’s take this issue on and lead, um, um, as we move towards the, the next presidential election, because President Biden might, might end up doing something away from Congress, which, uh, you know, uh, would be a promise fulfilled from his last, uh, presidential cycle. Um, but we’ll see.

Speaker: 5:

Uh, it’s, uh, certainly something that the industry needs.

Mina Mishrikey:

Yeah, I mean, I think if like that middle part of the south kind of comes online eventually, that’s some, uh, fertile growing, grounding general. So as we get towards, uh, you know, the release of interstate commerce, that’ll probably be a pretty good area to start growing from.

Speaker: 5:

Yeah. Yeah. Well, Kentucky is, yeah, it’s, it’s, there’s a lot of history with hemp in Kentucky, and actually we’re looking at a lot of industrial, uh, businesses down there. There’s a company that does, uh, hemp wood is the name of the company. Okay. So it’s wood flooring. And then there’s another company that, um, another area we haven’t talked, talked about, but protein applications, um, you know, talk about what this miracle plant can, can do for, you know, he,

Eric Schneider:

He and my granola this morning,

Speaker: 5:

Hemp seeds, <laugh>, you know, my kids eat hemp seeds every, every morning, 10 gram

Eric Schneider:

10 grams of protein per serving. Come on. You

Speaker: 5:

Know? Yeah. I mean, it’s, it’s not quite as concentrated as whe but it’s, uh, you know, it’s a lot better than pea protein, which we have in a lot of our produ products or a lot of allergens, like soy and dairy. Dairy is actually the perfect protein. Um, but, uh, I digress,

Eric Schneider:

<laugh>. Gotcha. How, I mean, how did you get into this space? You know, I, I know you have like a, like a heavy finance background and, you know, uh, worked at, uh, at Deutsche Bank previously, you know, how, how did you get into this space and, and your passion really for, for the industry?

Speaker: 5:

Um, I, it’s not as, um, uh, not as exciting of a story, but I was, yes, I was in banking and, um, really just felt, and I’m sure we’ve all felt this at some point in our career, I wasn’t fulfilled. Um, I felt like I was, you know, an actor on a stage as opposed to, um, really being motivated and aligned with a mission. Um, when Pennsylvania legalized, and I’m, I’m a Philadelphian, that hasn’t been set.

Speaker: 5:

Um, please withhold judgment, but, um, when Pennsylvania cannabis, um, I decided to, you know, uh, take a shot at getting, uh, one of the highly sought after medical licenses. I spent, uh, uh, you know, two years and built a group and we ended up failing. Um, and it was, uh, it was brutal <laugh>, um, and, uh, was sort of out of the banking industry, um, not even in the cannabis industry, even though I had built a, you know, 2000 page application and a full business plan for something that was gonna be really interesting, which was an interstate, uh, or sorry, inner city, uh, uh, grow in north Philadelphia in an area, uh, of town that, uh, uh, would’ve thrived if, if we could have built what we had quit.

Speaker: 5:

Um, and so I was kind of, you know, just, uh, you know, down in the dumps and, and, and I connected with Mitch brz, who I had known over the years through some common friends. And, um, and he said, why don’t you join? I, I need some, I need some help. And, and it’s been, uh, an amazing ride since, uh, joining forces with him and, and, and all my colleagues at, at Marita. Uh, and I’ve only become, you know, sort of more passionate about the plant, obviously, you know, have a personal relationship with the plant.

Speaker: 5:

Uh, you know, I typically use cannabis to go to the gym. It’s really strange, but that’s what I use cannabis for. Um, and, uh, and more to the point, what really kind of brought my heart into it more than anything, is helping patients over the years that, uh, uh, didn’t have access to cannabis, uh, and, and helping them, uh, in particular, uh, uh, a few cancer patients that really got benefits from the plant as they were going through chemotherapy.

Speaker: 5:

And, um, and now my, my current, uh, uh, passion, which is the sustainability angle in the industrial angle. So, you know, again, it’s just this miracle plant, you know, it’s, it’s, it’s, it’s a healthier vice. Uh, it’s medicine, it’s an industrial application, and it’s an amazing protein source. It’s just this god-given, uh, plant that ha that we have, you know, sort of shunned and made illegal, and now it’s coming out of the shadows, and it has massive, uh, uh, benefits for society as well as, you know, uh, uh, the potential for great returns for investors.

Speaker: 5:

And a lot of investors are scared right now. And, you know, uh, that, and, and I, I get it, like investing in anything right now that is off the run, um, that’s niche, that’s very growth oriented, is not, uh, the flavor of the month, especially as banks are going down left and right. Um, and the irony is, of course, that, uh, you know, the cannabis industry doesn’t have any banking exposure.

Speaker: 5:

So we’re really, we’re really kind of, uh, there,

Eric Schneider:

There was a lot of activity I’m, I’m sure you saw on LinkedIn where, you know, uh, obviously the stuff that happened with SVB and, and is, uh, is really unfortunate. But like there was, you know, a big moment for the cannabis industry saying like, oh, this is, this is your first time. Like, this has happened. <laugh>, you know, it’s, this is a, a constant thing that, you know, it’s, it’s all

Mina Mishrikey:

The James Franco meme.

Speaker: 5:

Yeah. The irony is of course, that, um, you know, signature Bank, which also went down Yeah. Which was really went down because of crypto. Um, but, but, uh, they also banked the cannabis space, uh, um, and in fact, they bank Marita, they bank our fund, and, and, and we recruited about, uh, our exposure prior to it blowing up. But the irony is that the US government is now banking cannabis, whether they know it or not, because they took over Signature bank.

Speaker: 5:

And, and I, I just find that irony. Boom. Uh, it, it just, it just makes me chuckle.

Mina Mishrikey:

I didn’t even think about that. Yeah. That’s crazy. I guess, you know, with that in mind, the, so even the smaller regional banks who, you know, some do work with campus companies, it doesn’t seem like there’s been much impact from any of those, you know, running the financial issues like Signature Bank either at this point, which is, you know, interesting to think about.

Speaker: 5:

Yeah, it’s, uh, look, I think the industry needs a banking solution. It’s a shame SafePass. Uh, we weren’t holding our breath for that. Um, but look, I think for us, it’s all about keeping our heads down, building these companies. You know, you’re pulling back from certain growth initiatives, you’re really focusing on cash flowing, and, you know, you’re just, it’s all about getting to the other side. Um, and the other side is gonna be bright skies. Um, we’re already starting to see green shoots in California.

Speaker: 5:

A lot of businesses are going out of business, and the pe the people that survive are just gonna take, take market share. Um, and from an investor’s standpoint, um, it’s scary. But, you know, history has told us time and again, that, um, that this is the, the time to invest, and we’re seeing it from, um, you know, evaluation standpoint as we invest in some of these companies at, at, at bargain basement prices.

Speaker: 5:

And, um, the highest returns are gonna be made based on the dollars that are invested now. And, and so that’s why, um, we’re still pedal to the metal. Um, and, uh, but certainly I’ll recognize that, uh, it’s become very, very hard to raise capital. There’s less money to go around the opportunity, cash cost for dollars that we invest is at an all time high. Um, but we also have a lot of institutional relationships that are, you know, ready, they’re ready to come into the space.

Speaker: 5:

They just need, you know, they just need some green shoes. They just need to know that the bottom is behind us and they’re waiting. And this space is gonna be flooded with capital, uh, prior to legalization. Um, and that’s probably gonna be the time to sell some of your assets, but right now is the time to invest your assets. And so we couldn’t be more excited about growing this industry with partners like, uh, like you guys at Alfa ru

Eric Schneider:

100%. And, you know, we’re, uh, very much aligned with that on, on how bullish we are and, and super excited for 2023 and, and what’s to come. And, you know, I guess to, to pivot to that, like what, what are some things that you’re most excited about, you know, either this year or, you know, in, in the upcoming years that we haven’t, you know, touched on yet, maybe?

Speaker: 5:

Well, I think I’ve spoken too much, so we might have touched on most of them, but, uh, <laugh>, uh, I think, uh, you know, for us, um, I, I’ll mention one, which was yesterday. Um, I was, uh, up in New York City, um, visiting one of our investments that’s about to open to the public, um, which is a museum of cannabis. It’s called, uh, T H T H C N Y C. Um, and I just walked through it yesterday.

Speaker: 5:

It’s, it’s awesome. It’s gonna be awesome. It’s gonna be really popular with the public and, and, you know, as the New York City adult use market is launching, um, hopefully it becomes, you know, uh, a cultural center for, for all things related to our industry. And, and, and, uh, um, and, and so just, uh, one thing to, for, for folks to look out for, if you’re in New York City, if you’re visiting New York City, uh, you know, uh, uh, take the edge off before you go to the museum, walk on through, have a good time.

Speaker: 5:

There’s a roof roof deck. You can, you can take the edge off from the roof on the roof deck. Uh, although I didn’t tell you that, uh, there’s a great lounge <laugh>,

Mina Mishrikey:

Uh, you

Speaker: 5:

Know, it’s, uh, it’s gonna be, it’s gonna be a cool place. It’s on, uh, on Broadway, uh, right by Camal Street. So it’s, uh, right in the, oh, nice third of hard soho and in a great, uh, you know, five story building that, uh, it’ll be cool. So check it up.

Mina Mishrikey:

That’s awesome.

Eric Schneider:

We’ll have to check that out. Ib.

Mina Mishrikey:

Yeah, we’ll go down there. We’ll, uh, we’ll take the excuse,

Eric Schneider:

We’re like 10 blocks away. So <laugh>,

Speaker: 5:

It’s opening next month. It’s opening next month, so, uh, I’ll, I’ll let you guys know. Uh, cool. But, uh, uh,

Eric Schneider:

I appreciate it. Um, no, and this has been, this has been an awesome conversation, Mina, and we wanted to, uh, to wrap things up with a little, little lightness. I’m gonna kick it to Isaac to, uh, ask a few, a few questions, and then we’ll, we’ll wrap it up. But like I said, I really appreciate the time and insight. Um, it’s been super valuable.

Mina Mishrikey:

Yeah. We’ll, um, we’ll move to some more, you know, fun personal stuff. Well, I, we see the guitar, so the normal question is, you know, what, what’s on the top of the Spotify or Apple Music, but we’ll go with what’s the favorite song you’re, you’re playing on your guitar these days, you know, what’s, uh, what’s been played the most lately?

Speaker: 5:

Uh, well, this is a bass guitar <laugh>. Um, I, I, I, I hold down the low end. I just joined a band in Philly called the, the, the Pana Maniacs. It’s a bunch of people that live on my street, which is Panama Street. So, you know, you can call how

Mina Mishrikey:

That’s, I love that

Speaker: 5:

<laugh>, how serious we’re

Eric Schneider:

<laugh>. Um,

Speaker: 5:

And, uh, you know, what’s on the playlist, uh, you know, um, we’ve got a big playlist that I’m getting up to speed on right now. So every night, you know, when I’m done work, you know, it’s sort of my saving grace as I get to it. It’s funny, I picked it, picked this up like, you know, maybe 10 years ago, and I’m not very good. But, um, as I got, as I get older, you know, you need some old, old, old people, old person hobbies that I can, I can do into my seventies and eighties, and, and I’ve got it. I don’t, I’m never bored.

Speaker: 5:

I always pick this thing up. Um,

Eric Schneider:

You’re not gonna, you’re not gonna be playing recreational hoops when you’re, when you’re 80. Yeah,

Mina Mishrikey:

I was gonna say, no, pick up basketball anymore,

Eric Schneider:

Up your knees,

Mina Mishrikey:

Headband. Look,

Speaker: 5:

I’m, I’m 45 right now, uh, you know, which I know I don’t look at, but I’m 45 and, uh, I still got it. I gotta tell you guys, I mean, I played ball yesterday, just, I, you know, I couldn’t miss, so maybe that has something to do with the cannabis usage before I play it, but, uh, <laugh>

Mina Mishrikey:

Takes the egg off for sure. <laugh> you

Speaker: 5:

What? You just don’t think about it. But, uh, back to music, uh, I’ve been playing a lot of Radiohead and, and talking Heads, uh, those are those. That’s

Mina Mishrikey:

Awesome. I love talking heads. Yeah. Um, have you ever heard, by the way, have you ever heard of Ruck Philly? Like, they’re like a WeWork for, you know, musicians in artists in Philly? One of my, one of my friends has worked there for a long time. Um, but it’s a good spot if you guys need Studio Space <laugh>.

Speaker: 5:

Yeah, I have heard of it. I haven’t checked it out, but I’ve been meaning to, a friend of mine is an investor, actually, um, a guy who actually works at Ju Juy, so, uh, I need to check it up.

Mina Mishrikey:

It’s a cool spot. Um, then next one is, uh, you know, on that book, Shelfer, is any, uh, books you would recommend everyone kinda look into or one that you’ve found yourself tearing back to from time to time?

Speaker: 5:

Um, I think, you know, kind of the book that I’ve read the most, like maybe five times or six times, is, uh, the Fountain Head by Hand. Rand, uh, is, you know, you know, kind of old and, you know, it’s a, you know, that, and Atlas Shrugged are sort of bibles for the conservative movement, which I’m not a con, you know, conservative from a, from a political standpoint, but it’s just so well written. Um, the characters are so real.

Speaker: 5:

And, you know, that’s one that I, uh, uh, keep on going back to. And then I guess the other one is, um, you know, uh, that I’ll mention since we were just talking about history, is, um, there’s a book, uh, called Everyone Loves Our Town, and it’s an oral history of the grunge era era in Seattle, uh, in the early, in the late eighties and the early nineties. And, um, I, I loved every page of that book. So those are two books I’ll mention.

Mina Mishrikey:

Love it. Yeah. E we really do need to, you know, release a, uh, I think we gotta make a book list. A book list, yeah. I don’t know if you and I can add to it. No, unfortunately. But, we’ll, we’ll definitely, I mean, so far we’re, so far there’s only been one book that’s been mentioned on any of our podcasts that I’ve read, so, um, we gotta get going

Speaker: 5:

On that. Which one was that?

Mina Mishrikey:

Um, uh, shooting Shoe Dog. Yeah, it’s all Night book. That

Speaker: 5:

Was just, just It’s a good one too.

Mina Mishrikey:

Yeah. Hey, that’s a good one. Um, all right, last one. You know, oh, go ahead. Sorry. I

Speaker: 5:

Was gonna say, cuz Shoe Dog reminded me of, you know, now that you guys are getting into the podcast business, a podcast that I’ve really become, uh, obsessed with recently, which is called Acquired. Um, it’s a basically, uh, the, his, it’s like long form, like three hour plus podcasts of, uh, you know, basically a single business. And they go through the history of that business. Um, and they’ve had everything from, you know, funds like Sequoia and Benchmark to Enron, to the nfl, and the, you know, and the NBA from a business standpoint perspective.

Speaker: 5:

And it’s just super interesting, um, to listen to. Um, it’s, it’s, and they’ve also created a community around their podcast. They have a Slack room where people, where people, you know, provide them input after the fact. And so it’s, it’s a good one. Uh, the acquired podcast. Highly recommend. I

Mina Mishrikey:

Like that. Yeah, I like that. Yeah, it seems sim a little similar to, uh, how I built this, like, very similar idea of Yeah. You know, going through the, uh, you know, the building process of companies. Um, all right, last one. Um, you know, what’s the, what’s the go-to meal or what would the last meal be? Um, if you had to pick one,

Speaker: 5:

Um,

Eric Schneider:

First thing that popped into your head.

Speaker: 5:

Uh, I would say, uh, I would say, uh, eggplant Farm.

Mina Mishrikey:

Oh, I love that. That’s a good one. Actually, I have a fun actual, like, final question, since you’re a Philly guy and I love doing this to other Philly people, uh, what’s uh, what’s your go-to cheese steak spot? Which one’s the best?

Speaker: 5:

Uh, um, well, I can, I need two. Um, yeah,

Mina Mishrikey:

You can go too,

Speaker: 5:

If you’re from Philly and anyone’s, anyone from Philly says Pats or Ginos, um, they don’t know what they’re talking about. Um, I ate a lot of, I ate a lot of this, this during colleges. I’m sure you did Isaac, and, uh, I was always a Pat’s guy over Ginos, but, uh, but no, the two now are number one. I grew up in the Northeast, so, uh, uh, uh, Steve’s, which is the Prince of Steaks as opposed to past Okay. Which is the king of Stakes, the Prince of Steaks is g is, is is, you know, sort of my childhood.

Speaker: 5:

Um, and then, uh, maybe three or four years ago, a, a place called Angelo’s opened up in, uh, uh, on Ninth and Bainbridge. And, and that’s probably the best cheese steak, uh, in the city. Um, well what’s the, what’s uh, what’s his name from uh, uh, who’s the guy who does the pizza reviews on, uh, on

Mina Mishrikey:

Instagram? Oh, uh, present. Present, yeah. Yeah, Portnoy. That’s nice.

Speaker: 5:

Portnoy. Yeah. So he, he’s done, uh, a review of Angelo’s Pizza, which he brings, as you know, I think it was a nine 9.20.

Eric Schneider:

Is that place in Philly? Yeah, I saw that. Yeah, yeah,

Speaker: 5:

Yeah, yeah. So that, that’s the best pizza in Philly. And they also have the best cheesecake in these guys are bread makers, so,

Mina Mishrikey:

Well that’s why

Speaker: 5:

<laugh>, so that’s why. And um, and he also does a review of the cheese steak stool. Presidente does a review of the, of the cheese steak and it’s worth, worth watching.

Mina Mishrikey:

All right. Well that just shows I need to go, well, when I’m back down in Philly in April for our alumni game, I’ll, I’ll stop off at Angelo’s and give it a try since I’ll think that, uh, it’s a little bit past my time in Philly <laugh>.

Speaker: 5:

Yeah, the thing about, the thing about Angelo’s is it’s like one of these classic Philly places where you can order online. Um, you gotta a call like 50 or a hundred times before you can get through cuz you just get a busy signal. Um, and then, you know, you gotta just, you know, whatever they tell you, you do. So if it’s like, you know, it’ll be ready in 30 minutes and you’re like, ah, I’m gonna be 45 minutes or an hour, they just hang up the phone on you. Um, it’s all cash. It’s just like super old school.

Speaker: 5:

So it’s, uh, it, it’s classic, uh, classic Philadelphia

Eric Schneider:

Sounds like the, the soup Nazi episode from like Seinfeld when he is like, if you don’t do it the right way, you get kicked outta the line. No soup for you.

Speaker: 5:

Totally <laugh>.

Eric Schneider:

Awesome man. Well, I, I think that was, uh, great way to, to cap this off Mina and just really appreciate you taking the time and, and providing the insight and, uh, giving us a little lens into, you know, some, some different aspects of the industry, specifically on the industrial hemp side and, and other things that you’re investing in emerita. And, um, I’m sure, I’m sure we’ll see each other soon on the, the conference circuit. And, uh, again, appreciate you taking the time here to be on Roots to Risk.

Speaker: 5:

Awesome guys. Thank you so much. It’s been an honor.

Mina Mishrikey:

Thanks man, I appreciate it.

Speaker: 5:

Take care.

Eric Schneider:

Another Um, really interesting. I, I love the, the conversation on the industrial hemp side because, you know, truthfully we just haven’t had as much insight into that. Um, and you know, most of it obviously is around, you know, the cannabis in, in the form of thc, both recreational and medical. So it was really great to get the, the other side, which has tremendous upside potential, you know, but ist uh, I feel like it’s not as like sexy as the THC side, so it gets kind of like, you know, um, not pushed to the side, but it’s, it’s a little under the radar.

Mina Mishrikey:

I mean, yeah, it’s funny. It is, um, you know, when you think about logically like long term because this is all a commodity, like being a sag it’s probably gonna be the, uh, the larger aspect of it rather than the CPG side. But yeah, I mean we only have a small, you know, amount of clients in that space right now because as being a said, it’s like very, it’s even younger it feels like than the canvas industry in general.

Eric Schneider:

Yeah. And it was, it was interesting saying like the supply chain issues, it, it feels like it’s not as much on the actual supply, but like the processing of it and, and how you unique it is, which was something that I, I didn’t, you know, personally know.

Mina Mishrikey:

Yeah. And I mean, I think the, the one good news is like, I can’t imagine that degradation is as big of an issue since you just want the fibers, um, rather than the cannabinoids. But you know, that’s something we’ll have to ask the next, uh, industrial hemp expert, cuz my knowledge is relatively limited on that

Eric Schneider:

100%. They didn’t, uh, they didn’t give you enough, uh, cannabis and, and, and hemp uh, education at the, uh, when you went to University of Maryland at your cannabis, uh, when

Mina Mishrikey:

It’s medical cannabis science and therapeutics. So it doesn’t really fall under the industrial hemp side too much. You know,

Eric Schneider:

Maybe you’ll have to get another one, another degree

Mina Mishrikey:

You can pay for it this time.

Eric Schneider:

<laugh>. Sounds good, man. Well, uh, appreciate you and, and awesome, um, awesome time, you know, getting a little better insight into me on what they’re doing and what they’re excited about. I love the positivity and the, uh, the energy around the industry and, uh, super excited for the next one. Let’s keep it rolling.

 

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