What investors look for in U.S. cannabis operators

A question we are often asked is what we look for when investing in U.S. cannabis businesses. While there are several layers to Tidal Royalty’s investment considerations, we’ve highlighted the ones that are absolutely essential.

Our President Terry Taouss shares some of the key characteristics that define “best-in-class” operators in the U.S. cannabis space:

  1. We seek established companies who approach the financing relationship with integrity. “This is really a long-lasting relationship that we are looking to build and we rely upon.”
  1. We consider operational experience. Do operators have the ability to build a business and compete in a market that is hyper-competitive?

  2. We look at the quality of a company’s go-to-market and distribution strategy. “How do they intend to build a moat around their business that is going to allow them to not only succeed in the short-term, but succeed when large national players inevitably come in once the industry is legalized fully?”

Further advice to cannabis entrepreneurs: The devil is in the details. Ask yourself how the financing you choose will affect you in the long run (hint: think beyond valuation).

Speaking of valuation: Remember why it matters. Terry says the reason that valuation is important to any operator and the reason it should be important are based on what you intend to do with your business and what your desired outcome is.

If you want insights on the legal U.S. cannabis industry, financing for cannabis companies and more, sign up for Tidal Royalty’s bi-weekly newsletter.

More uncharted

Q&A with Paul Rosen: Tidal Royalty CEO on valuation metrics and the future of cannabis

Read more

Funding the next stage of growth in the cannabis industry

Read more

Cannabis operators raising money: Get ready for due diligence

Read more

What investors look for in management teams of cannabis companies

Read more

Turning values and vision into an $8 million investment

Read more