Last week’s Benzinga Cannabis Capital Markets Conference in Miami kicked off on 4/20 bringing together a venerable cornucopia of the cannabis industry. Cannabis Now was on hand to connect with some of the industry’s most illustrious power players to discover where the market is heading. Two such thought leaders, Mitch Baruchowitz of Merida Capital Holdings and Troy Datcher of The Parent Company, shared some insights on what makes their successful companies tick, and why they chose to attend the Benzinga conference.
Baruchowitz’s slide presentation at the iconic Fontainebleau Miami Beach described using data to create a disruptive thesis. He elucidated Merida’s investment thesis as picking regions rather than companies. For 20 minutes, Baruchowitz went on to discuss data and disruption, explaining that the firm’s prediction model has helped them solidify their place as one of the cannabis industry’s leading investment groups.
“We find companies that we believe fit the areas that we think are disproportionately large, and I think that’s resonated in the last few years with people who want to hear how we keep ending up in the right place,” he said.
Baruchowitz says Merida Capital uses its Twitter account as a prediction engine, and that the data he’s talking about isn’t that data. Rather, he refers to predictive economic data as “the future that is going to arrive.”
“That’s on a trajectory,” Baruchowitz said. “We did make predictions four years ago about the projections. We said, ‘Projections were people being revised upwards based on state adoption.’ So, we nailed that because I think most people are projecting $28 billion for 2025. We’re now at approximately $40-$42 billion. Every year its applications keep going up. The data we’re using primarily is more like thin-sliced, precise data that tells us something notable about something, and then we do the work.”
Baruchowitz isn’t a big fan of the “predictors.” He says he believes that they’ve been wildly wrong because of cannabis’ newness; and it’s impossible to be correct.
“Merida doesn’t use that type of forward-looking projection,” Baruchowitz said. “I think that it’s effortless for people to project the blank slate of Colombia, for example. There’s been a new blank slate every year, such as in Lesotho. There’s always a shiny new object. Being in the cannabis space for a long time and having many employees means that you don’t have to go down that road and run into a brick wall when you find out the projections are off.
Baruchowitz insists that Merida is more about discrete data packets. He believes the company analyzes things that no one else does. Most of his investors are high net-worth individuals or entrepreneurs who want sophisticated exposure to cannabis on the investment side.
California-based, consumer-focused cannabis business, The Parent Company (TPC), potentially represents such an investment. TPC’s company portfolio includes trusted consumer packaged goods (CPG) brands, such as Caliva and Jay-Z’s more recent Monogram. The company’s newly minted CEO, Troy Datcher, believes the brands will be the basis of the cannabis industry’s future.
Datcher attended the Benzinga conference to network with investors as well as regulators. He believes the conference presents an excellent opportunity for him to meet other industry entrepreneurs.
“I’d been in the cannabis industry for 150 days as of the beginning of Benzinga last week. So, attending the conference was a great opportunity for me to mix and mingle with the folks that are a part of the industry and can provide some insight on the challenges they’re facing and how they’re tackling some of those challenges,” Datcher said, adding that the Benzinga conference provides TPC with a platform for sharing their own story.
“Hopefully that story resonates with either someone who wants to be a member of our team, or to analysts who are there covering companies like ours, as well as investors,” he said.
“It was great and informative to hear where our latest legislators are in terms of supporting the industry,” he said.
Datcher cites the variety and diversity of the speakers as another draw of the Benzinga conference.
“I think the content and the types of folks who showcased were incredibly diverse and impressive. From a single-state operator (SSO) to multi-state operators (MSO) to folks on the front end of innovation for the industry, Benzinga creates an atmosphere where everyone wants to participate in the conversation,” Datcher said. “That’s great for someone like me, who again, is looking to absorb as much as possible and create a great curve for learning.”