April 7, 2020 • 18 mins
Michael Scott - CHAIRMAN, CEO AND FOUNDER - Michael Scott is an entrepreneur, family man, and martial artist with a passion for life. Michael’s core values are Family, Integrity, Helping Others, Leadership, Loyalty. During Michael’s two-decade career in Wealth Management, he became one of the youngest top 1% ranked advisors at Ameriprise Financial. He put his first deal together with the executives of Ameriprise Financial in a seven-figure acquisition that became the company’s first external practice acquisition. Fast forward a handful of years and Michael is now the Founder/Owner of BAM Partners LLC an entrepreneurial holding company of 7 businesses and growing.
Michael’s professional focus has now shifted to the cannabis industry. Michael’s been instrumental in bringing cannabis companies from pitch deck to nine-figure valuations with the infusion of smart capital, strategy, and purpose-driven leadership. Michael and team have developed an extensive lead in replicating “Shark Tank” in cannabis for the Boston area.
Michael’s unique ability is to strategically lead and develop entrepreneurs toward their own values-based excellence. On a personal note, he’s an avid martial artist and loves to teach and train multiple disciplines such as MMA, Brazilian Jiu Jitsu, Muay Thai and Taekwondo. Michael is happily married to his wife, Kerri, and they share three kids.
Peter Dougherty – CEO Orion Partners.ai Inc. - Peter has over 20 years of CEO experience in financing, managing and transacting early and mid-stage companies and has raised over $130M in Venture Capital, Private Equity and micro-cap funds. Currently CEO at Orion Partners.ai Inc. providing artificial intelligence for precision agriculture for large cannabis producers. Previously Consulting General Manager of Medicinal Genomics, providing the genetics of Cannabis. Also, previously General Manager Sequencia Technologies a cloud infrastructure consulting and implementation firm that developed the first fully integrated cloud compute, storage and networking virtualization solution. Before Sequencia, Peter was the CEO & Founder of Certeon Inc., the first virtualized WAN optimization and cloud interconnect software company. Prior to Certeon he was CEO of Bitcasting, the first universal multimedia player for the web. Peter’s career in technology solutions also includes a senior position at EMC in their Media Solutions Group after EMC acquired Bitcasting. Peter also Skippers Peningo, a custom Dubois 49 sailboat in and around New England waters.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Richard C. Wilson (00:01):
Hello, this is Richard C.
Wilson from the family officeclub.
We're doing a member spotlightinterview today.
Today.
We have with us Michael Scott aswell as Peter Dougherty welcome
both of you.
Thanks Richard.
Appreciate having a song likeyour Richards shirt.
So why don't we go Michael firstand just, uh, introduce yourself
maybe, uh, just a quick summaryof, of what you do at Canon
(00:21):
printers.
Michael Scott (00:22):
Sure, sure.
I'm a CEO and founder ofCannopin our partners and uh,
you know, we're a cannabis basedholding company and you know,
essentially what we focus on is,you know, finding amazing
entrepreneurs.
That's part of the reason why Iasked Peter to come on board
because you know, he would be anexample of when those
entrepreneurs will be fine.
So what we do is we like to findthese early stage businesses.
(00:44):
We like higher risk investments,early stage, uh, and essentially
we like to bring capital, youknow, business strategy and
leadership to the table to helpfor explosive growth.
Richard C. Wilson (00:55):
Okay, great.
And, um, Peter, I know you metMichael and then that's how we
all connected here for this callto kind of explore what you both
do and how they relate to eachother.
Um, so can you explain a littlebit about your company and what
you're up to?
Peter Dougherty (01:09):
First of all, I want to thank uh, Michael
because he's made my day becauseI can tell my wife that somebody
said I was amazing on a Fridaymorning.
So I'm going to utilize that.
Um, so, uh, CEO of Orionpartners, which is a enabling
technology for the cultivationproduction market.
And essentially the problemwe're solving is helping these
(01:30):
multi-state operators that haveacquired a number of properties,
figure out how to use thosesystems to scale production
cause they're struggling withthat right now.
And especially in given the timethat we're going through right
now with[inaudible], the abilityto take an asset that they'd be
spent hundreds of millions ofdollars on and enable them to,
(01:51):
uh, create more grams per squarefoot with that production is a
great outcome for them.
So that's what we're up to.
Richard C. Wilson (01:57):
Okay, sure.
And I know, um, Michael, youlook at a deal a day, literally
sometimes more in the cannabisspace.
And when you look at startups,everyone has great projections.
No one's showing a badprojection.
So how do you sift through allof that?
You obviously thought Peter wasa top 1% or 0.1%, all this stuff
that you're seeing.
(02:18):
You've talked to some, a littlebit about, you know, your
mentality on, on picking theteams and picking the leaders
and how
Michael Scott (02:24):
you came to take theater.
Sure.
I mean, it's, it's, it's a, youknow, a skill been developed
over time.
I would tell you, it's notalways easy to do because I
mean, if you think aboutfounders and CEOs and Polish
leaders that have sales skills,it can, they can often times be
very intriguing, kind of caughtup into everything.
What a, it's important, youknow, in the world of private
(02:46):
placement investing, it'scritical that you're really
understanding all the risks.
You know, and I tell investors,cause the, the, the second part
of what we do is we investdirectly in companies like
Peter, but then also help, uh,you know, bring in strategic
investors, both smaller andlarger investors to help boost
these businesses through to thenext level.
(03:08):
So it's critical for us, youknow, cause we, you know, you
know, basically live and diebased on our reputation and our
track record.
So it's critical for us to makesure we're, we're vetting, we're
understanding every risk, we'reunderstanding, Hey, what's the
likelihood of this entrepreneurbeing successful?
And so, you know, one of thethings, Peter, that I thought
was interesting and part of thereason why I personally invested
(03:30):
in Peter and I was one of thevery early earliest stage
investors is number one, Ibelieved in Peter.
I just felt a sincere sense ofintegrity.
And I, I, I believe in vettingfor integrity.
A lot of businesses don't, don'tfocus on that as much.
But number two, I also thinkthat the marketplace, you know,
has to actually have a need fora service.
(03:51):
And Peter, you know, I simplifywhat his company does and
taking, you know, thesecultivations that have millions
and millions of dollars worth ofcannabis growing and helps them
really optimize that, grow inthe slightest fine tuning of
that environment really can helpcreate, you know, millions and
millions of dollars per quarterof extra yield or the other side
(04:13):
is you prevent it from actuallyfalling apart.
When you look at globally what'shappened to the public markets,
you know, a lot of thesecompanies, one of the areas they
were weekend and why the stockprices declined, they weren't
hitting their revenue numbers.
So Peter's kind of technology,hardware and software directly
hits kind of what a big gapinggap is in the industry.
(04:34):
And I actually learned this fromyou.
Repeat, um, Richard is I lookfor choke points in an industry.
I believe that there's a chokepoint.
So I believe I've found a guythat's actually got a value
proposition to help blow througha choke point and now he's even
fine tuning and we're kind ofredesigning the um, the
monetization model where I thinkhe's making it even bigger and
(04:55):
no brainer for these businessesto hire us.
Richard C. Wilson (04:57):
Right, right.
So if we zoom out as basically,you know, Kana preneurs is not
an investment bank.
It's not, you know, a placementagent, capital raising team,
it's really a holding company.
So you're really actingdifferently out there.
Then in other organizations,you're not a family office and
you're also not an operator of asingle cultivation spot.
So what you're seeing is kind ofthe view of the forest and how
now all these cultivationcenters are open, some of the
(05:19):
retail centers, all thesedifferent iterations on CBD and
cannabis related products.
And I guess you're saying thatPeter's software and solutions
are able to optimize the outputand now that things are actually
operational across hundreds oflocations, if not thousands, you
can optimize that, that outputand their net profits and their
(05:42):
ability to be very effective.
Versus like at the beginning itwas a huge rush just to get
permits in a rush to get open ina rush to see if it was all real
operationally.
Now we're at that, you know,it's still maybe the third or
fourth any, but yeah, nowthere's a lot of real businesses
out there that need, I guessthat's what this is filling to
me.
Michael Scott (05:59):
Absolutely.
And as Peter was pitching me,you know, and he's phenomenal at
what he does and pitching.
In fact, uh, you know, Peter'sraised over a hundred million,
you know, in the tech sectorbefore he got into the cannabis.
So he's good at what he does.
But I, I couldn't believeeverything he was saying at face
value.
Right.
You just can't.
That's not the way it works whenyou're doing the shark tank
(06:19):
game.
Right.
So, you know, even though he'stalking about these increased
yields, I had to validate that.
Right?
So I said, great, give me, youknow, some of the names of, of
who's utilizing your stuff andsome of my shock and surprise
you.
He's actually already workingwith some of the biggest brands
in the industry.
And so I said, Hey, I'd like totalk to that cultivator.
And I didn't just talk to him onthe phone, but at first I talked
(06:40):
to him on the phone, but I wentthere in person and then I
actually got in the trencheslearned why does he believe
Peter software hardware isvaluable.
And what I quickly learned was,you know, this particular big
multi-state operator had 11cultivations in various States
around the country.
And he said, look, we're outproducing and how Ealing all the
(07:02):
other sister cultivationsbecause of Peter.
And then he said before we wenton to say, I actually believe
we're on our way to actuallycreating some of the best yields
and creating a world record.
Now maybe that's true, maybeit's not.
But one thing I did walk awayfrom knowing is at the end
consumer level, he was a ravingfan of Peter's product.
(07:23):
Right?
Then I brought him to one of myportfolio companies and you
know, to further vet him cause Isaid, you know what, I want to
see if the CEO of Mikecultivation retail business, you
know, and you know, the actualcultivators themselves will also
feel the same way is that other,you know, maybe somewhat bias
cultivating.
They basically hired him on thespot, this the second meeting.
(07:44):
Right.
So I started getting real worldproof and validity that the end
consumer wants what he'sdelivering.
Right.
You have to do that when you'revetting these businesses.
Richard C. Wilson (07:55):
Right, right.
Yeah.
And um, so if, if it, if aninvestor is listening to this,
maybe they've invested in canvasbefore, maybe, maybe they have
not.
Um, either way.
What do you think the number onedue diligence question is?
You know, Peter or my goal thatsomebody should be asking you?
Um, most people don't and youdon't know why they're not,
they're asking other questionscause their knowledge is here
(08:18):
and it's not up here.
They don't know what they don'tknow.
Is there any suggestions youhave for if they're looking at
an investment with one of youtwo or a different investment in
the industry, what they ask?
Michael Scott (08:26):
Yeah, so I think one of our differentiators, one
of our edges too, you know, it'svery common for businesses to
look at proformas to look at thepitch stacks, look at the legal
documents.
Like I look at those as, yes.
So those are must dudes, right?
One of the different things thatwe do is I'm really big on track
record of success, right?
(08:47):
So if somebody that I'm meetingis pitching me has a consistent
and compelling track record ofsuccess, that's one of the
biggest predictors of futuresuccess.
But then I go a level deeperwhen I'm really betting for
Richard is emotionalintelligence.
Because in the cannabis industryyou're going to get more Paul's
than most industries.
You can't make it in otherindustries.
You're not going to make it inthis one.
(09:07):
So that was one of the thingsI've been for Peter.
Like, I mean, he's deliveredfive extra turn investors.
I've extra turns to previousinvestors.
He's raised over a hundredmillion dollars.
He's actually already done whathe's doing in the cannabis
industry, in other industries.
Right.
So key things, you know, becausenow if I've got a track record
of success, I, I've gotsomething that I can, you know,
(09:28):
build integrity and trust andcompetence on so,
Richard C. Wilson (09:31):
right, right.
So Peter, I know Michael looksat you and you know, he's
basically saying it's about theleader, it's about the team,
it's about the track record ofsuccess.
And we talked a little bit aboutthe macro opportunity, but you
yourself investing your own timeand energy, GNS dedicated, you
know, years of your life gettingthis off the ground and giving
it fully up to speed, et cetera.
Um, what would you say your mostfocused on to make this a big
(09:55):
success or what, what elsebesides your own track record?
Um, and kind of that macro viewyou think investors should be,
you know, could keep in mind orbe thinking through, you know,
while speaking to you?
Peter Dougherty (10:06):
Yeah, I think trackers are really important,
but there, that's really allthey are is a record of the
past.
And um, what you're investing inis today that person's ability
to execute based on the marketrequirement and this solution
and bringing to the table andthe driver behind that.
In every case in every companyI've been in, this, my fifth
early stage company is the team.
(10:28):
And so what I try to do isattract rock stars.
Most of the guys I'm workingwith, I've worked with in two or
three companies previously.
Um, so number one, we've workedtogether, we know how to operate
together and then what we'vedone is attracted additional
rock stars to help us execute.
And I think, um, just to reflectback something that Michael
said, one of the reallyimportant, so I've got the,
(10:50):
this, we're a seed stage companyat this point, but I've got the
GM from Amazon as an investor,the former CFO and vice chairman
from GE as an investor.
And Michael's the only one thatcame in, met the grower and the
grower literally said to them,we went from 40 grams a square
foot to 90, which 90 grams persquare foot to them means$10
(11:14):
million a year in return oninvestment.
The reason I was able to do thatwasn't because of my track
record.
It's because of the guys I'vegot around me from an
engineering perspective that doall the work behind the curtain
to make sure that we can drivevalue for customers.
And what happens is when you candrive Gramps per square foot
production increases, the ROI isone growth cycle for our
(11:36):
platform right now.
So it's really compelling.
But the halt, the center of thatuniverse is the team and their
ability to operate and competein a really, um, difficult and
wild and wooly market, which isthe cannabis market.
Richard C. Wilson (11:51):
Right, right.
Yeah.
Okay.
That makes sense.
I, that's amazing results.
I would guess that even if theyincrease production by 7%, it
would probably more than pay foryour solution
Peter Dougherty (12:00):
percent to them as a million dollars a year on
an annualized basis.
Richard.
And our cost is 50,000.
Richard C. Wilson (12:06):
So if they improve by one or 2%.
Yeah.
Interesting.
Well, uh, that's pretty, prettyenormous potential numbers
there.
And you have a functionalfunctional product though, it
sounds like already you're ableto be beta testing this for some
additional,
Peter Dougherty (12:23):
yes.
So we're in commercialdeployments with a couple of the
large multi-state operators, afew others that we're going to
pilot with and then a bunch ofsingle site operators that are
mostly strategic, uh,implementation.
So what we decided to do, we'vedone tech before and what we
decided to do was build theproduct beta, test it, and then
announce it to the market, notthe other way around.
(12:44):
So it's a commercial releaseproduct.
Now
Richard C. Wilson (12:47):
that's smart.
Maybe that comes from your techbackground and knowing just how
far it is to raise capital andthere's nothing functional yet.
There's nothing proven yet.
There's no track record, there'sno ROI on the people using it.
I mean that is just, it's veryhard to raise capital for
something like that versushaving beta test examples and
pointing to it because thosepeople have to become your
investors first of all.
And then second of all, you canjust have them go visit it like
(13:08):
Michael did.
So everything we've talkedabout, you know, I think that is
very interesting for anyonelistening to this because it's
so aware.
A lot of pre seed companiesdon't have that.
So someone's listening andthey're about to launch company.
I would definitely get somethingcommercially viable before they
raise capital, if at allpossible.
And usually people just have theattitude of, Oh, that's not
possible.
We need to raise 5000001st,otherwise we don't have anything
(13:29):
yet to deploy yet, et cetera.
And it's a chicken and eggsituation that I guess you guys
have been able to navigate.
Peter Dougherty (13:35):
Yeah, it's really interesting because we've
done it before.
The, the majority of the teamworks because they're dedicated
to the idea.
They work for equity only rightnow until we close the series a
and then they go on salary onequity.
So it's, it's sort of the um,uh, the special forces version
of how to start an early stagecompany and get a team that's
(13:57):
dedicated to each other, theideals of what you're going to
build, go out and build it andthen get paid for it, not the
other way around.
Richard C. Wilson (14:05):
Right, right.
Yeah.
That's great.
That's different than how a lotof people approach it.
Yup.
Anything else that either ofyou, one of you want to
communicate during thisinterview before?
I know they've not got a chanceto ask some of the questions you
might have liked me to.
Um, but anything else you wantto address?
Peter Dougherty (14:21):
I'll let Michael go first.
Michael Scott (14:24):
Um, no, let me see.
Anything that's, I'd like toaddress.
I mean, I don't know.
I guess my, my, I just say itkind of a message to investors
is that, um, right now witheverything that's going on, I
know a lot of the world is kindof going in a defense.
I think this is one of the bestdamn times ever to be an
(14:44):
offense.
And I think that the best dealsand private investment, I think
if you're looking at publiclytraded investments, um, you
know, I, I think it's reallydifficult to focus on positivity
during, in chaotic times.
But I think you, um, man,there's, there's just tremendous
opportunity.
So I would just say, you know,for investors, the
(15:07):
opportunistic, I think right now, uh, an investment offering,
you know, like Peter's tech andcannabis or cannabis before all
may not be first thing thatcomes to mind.
But what would you gottaremember is if you pick the
right player, an alreadydepressed market, and then you
take a very nascent market likecannabis, it gets even more beat
(15:28):
up because of the publicutility.
While you're getting someamazing, amazing prices, you
know, and think of logically,people don't think like that,
right?
When a price is going down, theygo, it's junk.
I don't want to go in.
Well I want to, I want to buyit.
When it's going up like this.
Guess what, when your shareprice is expensive, it's the
worst possible time to buy.
Right?
We'll apply the logic of groceryshopping and you know, like if
(15:51):
you see 200 at a discount, itmakes sense to buy twice as
much.
Right?
But people buy that toinvesting.
And so this is why our averagesize, you know, your average,
what we call odd lot investoractually loses it, comes to the
investment.
Again, the vast close to gettingwhat the S and P 500 index will
make.
Richard C. Wilson (16:10):
Right, right.
Yeah, no, that definitely a verygood point.
And I think that's a relevant toanybody listening.
Um, you know, if you have someliquidity or the ability to
invest a little bit, it's gonnaget you a lot more than it will
three years from now.
Assuming things recover or, youknow, 18 months from now when a
vaccine is out and things havemostly recovered, etc.
So, uh, theater.
Anything else from you before?
Peter Dougherty (16:29):
Two things if you don't mind.
One is the reason Michael and Iare working together is because
of the ethos, which with Michaelis approaching the market and
his, uh, ability to dig in, um,do the work and then understand
how to operate in difficulttimes, which is these are the
times to define people and tofind who you are as a person.
(16:50):
I think the most difficultthings.
And then secondly, what makesthis different, what we're doing
right now is the technology thatwe're using to enable these
large operators is a virtualsystem.
So we can operate it where, youknow, the market right now,
there's no travel, uh, nobody'sjumping on planes.
(17:10):
We're doing an installationright now virtually with one of
the largest operators in Canadaby, and everything's going to be
virtual.
So we're literally installing,so we're picking shovel company,
but the picks and shovels arereally data, uh, that travels
virtually.
So it's a great time to be avirtual implementation company
like we are.
Richard C. Wilson (17:31):
Right, right.
Yeah, that's great.
And a subscription and recurringrevenue companies are a hot
thing of the last three to fiveyears.
Everyone's going that directionfrom Microsoft to even our
family office club is, issubscription based.
So it's kind of on point theretoo, which is a great, awesome.
Well then, uh, what would be thebest thing for someone do if
they wanted to reach out tolearn more?
Where can they get ahold of youguys and um, you know, start a
(17:53):
conversation.
Michael Scott (17:54):
So, you know, I mean if they're wanting to learn
just about cannabis investingoverall, when you get in touch
with me,[inaudible] partners.comwould be the best spot in terms
of, you know, finding me and youcan actually learn about Peter's
company either through me and ofcourse, you know, the, the
viewpoint I'm going to do is I'mgoing to, I'm going to share
with you kind of from aninvestors realm, kind of what
you should be thinking aboutboth risks and the reward.
(18:17):
And then either if you want toshare your website out to you
directly.
Richard C. Wilson (18:20):
Yeah.
Orion partners.org.
Uh, O.
R.
I.
O.
N.
okay.
Partners and appreciate theopportunity.
Richard, thank you so much.
Yeah, no problem at all.
And now, once our live eventsstart back up and a couple of
months and the CDC gives us athumbs up and, uh, we'll see you
both, maybe one of those liveevents here, so look forward to
it.
Okay.
(18:41):
Cheers.
Hello, this is Richard C.
Wilson from the family officeclub.
We're doing a member spotlightinterview today.
Today.
We have with us Michael Scott aswell as Peter Dougherty welcome
both of you.
Thanks Richard.
Appreciate having a song likeyour Richards shirt.
So why don't we go Michael firstand just, uh, introduce yourself
maybe, uh, just a quick summaryof, of what you do at Canon
(00:21):
printers.
Michael Scott (00:22):
Sure, sure.
I'm a CEO and founder ofCannopin our partners and uh,
you know, we're a cannabis basedholding company and you know,
essentially what we focus on is,you know, finding amazing
entrepreneurs.
That's part of the reason why Iasked Peter to come on board
because you know, he would be anexample of when those
entrepreneurs will be fine.
So what we do is we like to findthese early stage businesses.
(00:44):
We like higher risk investments,early stage, uh, and essentially
we like to bring capital, youknow, business strategy and
leadership to the table to helpfor explosive growth.
Richard C. Wilson (00:55):
Okay, great.
And, um, Peter, I know you metMichael and then that's how we
all connected here for this callto kind of explore what you both
do and how they relate to eachother.
Um, so can you explain a littlebit about your company and what
you're up to?
Peter Dougherty (01:09):
First of all, I want to thank uh, Michael
because he's made my day becauseI can tell my wife that somebody
said I was amazing on a Fridaymorning.
So I'm going to utilize that.
Um, so, uh, CEO of Orionpartners, which is a enabling
technology for the cultivationproduction market.
And essentially the problemwe're solving is helping these
(01:30):
multi-state operators that haveacquired a number of properties,
figure out how to use thosesystems to scale production
cause they're struggling withthat right now.
And especially in given the timethat we're going through right
now with[inaudible], the abilityto take an asset that they'd be
spent hundreds of millions ofdollars on and enable them to,
(01:51):
uh, create more grams per squarefoot with that production is a
great outcome for them.
So that's what we're up to.
Richard C. Wilson (01:57):
Okay, sure.
And I know, um, Michael, youlook at a deal a day, literally
sometimes more in the cannabisspace.
And when you look at startups,everyone has great projections.
No one's showing a badprojection.
So how do you sift through allof that?
You obviously thought Peter wasa top 1% or 0.1%, all this stuff
that you're seeing.
(02:18):
You've talked to some, a littlebit about, you know, your
mentality on, on picking theteams and picking the leaders
and how
Michael Scott (02:24):
you came to take theater.
Sure.
I mean, it's, it's, it's a, youknow, a skill been developed
over time.
I would tell you, it's notalways easy to do because I
mean, if you think aboutfounders and CEOs and Polish
leaders that have sales skills,it can, they can often times be
very intriguing, kind of caughtup into everything.
What a, it's important, youknow, in the world of private
(02:46):
placement investing, it'scritical that you're really
understanding all the risks.
You know, and I tell investors,cause the, the, the second part
of what we do is we investdirectly in companies like
Peter, but then also help, uh,you know, bring in strategic
investors, both smaller andlarger investors to help boost
these businesses through to thenext level.
(03:08):
So it's critical for us, youknow, cause we, you know, you
know, basically live and diebased on our reputation and our
track record.
So it's critical for us to makesure we're, we're vetting, we're
understanding every risk, we'reunderstanding, Hey, what's the
likelihood of this entrepreneurbeing successful?
And so, you know, one of thethings, Peter, that I thought
was interesting and part of thereason why I personally invested
(03:30):
in Peter and I was one of thevery early earliest stage
investors is number one, Ibelieved in Peter.
I just felt a sincere sense ofintegrity.
And I, I, I believe in vettingfor integrity.
A lot of businesses don't, don'tfocus on that as much.
But number two, I also thinkthat the marketplace, you know,
has to actually have a need fora service.
(03:51):
And Peter, you know, I simplifywhat his company does and
taking, you know, thesecultivations that have millions
and millions of dollars worth ofcannabis growing and helps them
really optimize that, grow inthe slightest fine tuning of
that environment really can helpcreate, you know, millions and
millions of dollars per quarterof extra yield or the other side
(04:13):
is you prevent it from actuallyfalling apart.
When you look at globally what'shappened to the public markets,
you know, a lot of thesecompanies, one of the areas they
were weekend and why the stockprices declined, they weren't
hitting their revenue numbers.
So Peter's kind of technology,hardware and software directly
hits kind of what a big gapinggap is in the industry.
(04:34):
And I actually learned this fromyou.
Repeat, um, Richard is I lookfor choke points in an industry.
I believe that there's a chokepoint.
So I believe I've found a guythat's actually got a value
proposition to help blow througha choke point and now he's even
fine tuning and we're kind ofredesigning the um, the
monetization model where I thinkhe's making it even bigger and
(04:55):
no brainer for these businessesto hire us.
Richard C. Wilson (04:57):
Right, right.
So if we zoom out as basically,you know, Kana preneurs is not
an investment bank.
It's not, you know, a placementagent, capital raising team,
it's really a holding company.
So you're really actingdifferently out there.
Then in other organizations,you're not a family office and
you're also not an operator of asingle cultivation spot.
So what you're seeing is kind ofthe view of the forest and how
now all these cultivationcenters are open, some of the
(05:19):
retail centers, all thesedifferent iterations on CBD and
cannabis related products.
And I guess you're saying thatPeter's software and solutions
are able to optimize the outputand now that things are actually
operational across hundreds oflocations, if not thousands, you
can optimize that, that outputand their net profits and their
(05:42):
ability to be very effective.
Versus like at the beginning itwas a huge rush just to get
permits in a rush to get open ina rush to see if it was all real
operationally.
Now we're at that, you know,it's still maybe the third or
fourth any, but yeah, nowthere's a lot of real businesses
out there that need, I guessthat's what this is filling to
me.
Michael Scott (05:59):
Absolutely.
And as Peter was pitching me,you know, and he's phenomenal at
what he does and pitching.
In fact, uh, you know, Peter'sraised over a hundred million,
you know, in the tech sectorbefore he got into the cannabis.
So he's good at what he does.
But I, I couldn't believeeverything he was saying at face
value.
Right.
You just can't.
That's not the way it works whenyou're doing the shark tank
(06:19):
game.
Right.
So, you know, even though he'stalking about these increased
yields, I had to validate that.
Right?
So I said, great, give me, youknow, some of the names of, of
who's utilizing your stuff andsome of my shock and surprise
you.
He's actually already workingwith some of the biggest brands
in the industry.
And so I said, Hey, I'd like totalk to that cultivator.
And I didn't just talk to him onthe phone, but at first I talked
(06:40):
to him on the phone, but I wentthere in person and then I
actually got in the trencheslearned why does he believe
Peter software hardware isvaluable.
And what I quickly learned was,you know, this particular big
multi-state operator had 11cultivations in various States
around the country.
And he said, look, we're outproducing and how Ealing all the
(07:02):
other sister cultivationsbecause of Peter.
And then he said before we wenton to say, I actually believe
we're on our way to actuallycreating some of the best yields
and creating a world record.
Now maybe that's true, maybeit's not.
But one thing I did walk awayfrom knowing is at the end
consumer level, he was a ravingfan of Peter's product.
(07:23):
Right?
Then I brought him to one of myportfolio companies and you
know, to further vet him cause Isaid, you know what, I want to
see if the CEO of Mikecultivation retail business, you
know, and you know, the actualcultivators themselves will also
feel the same way is that other,you know, maybe somewhat bias
cultivating.
They basically hired him on thespot, this the second meeting.
(07:44):
Right.
So I started getting real worldproof and validity that the end
consumer wants what he'sdelivering.
Right.
You have to do that when you'revetting these businesses.
Richard C. Wilson (07:55):
Right, right.
Yeah.
And um, so if, if it, if aninvestor is listening to this,
maybe they've invested in canvasbefore, maybe, maybe they have
not.
Um, either way.
What do you think the number onedue diligence question is?
You know, Peter or my goal thatsomebody should be asking you?
Um, most people don't and youdon't know why they're not,
they're asking other questionscause their knowledge is here
(08:18):
and it's not up here.
They don't know what they don'tknow.
Is there any suggestions youhave for if they're looking at
an investment with one of youtwo or a different investment in
the industry, what they ask?
Michael Scott (08:26):
Yeah, so I think one of our differentiators, one
of our edges too, you know, it'svery common for businesses to
look at proformas to look at thepitch stacks, look at the legal
documents.
Like I look at those as, yes.
So those are must dudes, right?
One of the different things thatwe do is I'm really big on track
record of success, right?
(08:47):
So if somebody that I'm meetingis pitching me has a consistent
and compelling track record ofsuccess, that's one of the
biggest predictors of futuresuccess.
But then I go a level deeperwhen I'm really betting for
Richard is emotionalintelligence.
Because in the cannabis industryyou're going to get more Paul's
than most industries.
You can't make it in otherindustries.
You're not going to make it inthis one.
(09:07):
So that was one of the thingsI've been for Peter.
Like, I mean, he's deliveredfive extra turn investors.
I've extra turns to previousinvestors.
He's raised over a hundredmillion dollars.
He's actually already done whathe's doing in the cannabis
industry, in other industries.
Right.
So key things, you know, becausenow if I've got a track record
of success, I, I've gotsomething that I can, you know,
(09:28):
build integrity and trust andcompetence on so,
Richard C. Wilson (09:31):
right, right.
So Peter, I know Michael looksat you and you know, he's
basically saying it's about theleader, it's about the team,
it's about the track record ofsuccess.
And we talked a little bit aboutthe macro opportunity, but you
yourself investing your own timeand energy, GNS dedicated, you
know, years of your life gettingthis off the ground and giving
it fully up to speed, et cetera.
Um, what would you say your mostfocused on to make this a big
(09:55):
success or what, what elsebesides your own track record?
Um, and kind of that macro viewyou think investors should be,
you know, could keep in mind orbe thinking through, you know,
while speaking to you?
Peter Dougherty (10:06):
Yeah, I think trackers are really important,
but there, that's really allthey are is a record of the
past.
And um, what you're investing inis today that person's ability
to execute based on the marketrequirement and this solution
and bringing to the table andthe driver behind that.
In every case in every companyI've been in, this, my fifth
early stage company is the team.
(10:28):
And so what I try to do isattract rock stars.
Most of the guys I'm workingwith, I've worked with in two or
three companies previously.
Um, so number one, we've workedtogether, we know how to operate
together and then what we'vedone is attracted additional
rock stars to help us execute.
And I think, um, just to reflectback something that Michael
said, one of the reallyimportant, so I've got the,
(10:50):
this, we're a seed stage companyat this point, but I've got the
GM from Amazon as an investor,the former CFO and vice chairman
from GE as an investor.
And Michael's the only one thatcame in, met the grower and the
grower literally said to them,we went from 40 grams a square
foot to 90, which 90 grams persquare foot to them means$10
(11:14):
million a year in return oninvestment.
The reason I was able to do thatwasn't because of my track
record.
It's because of the guys I'vegot around me from an
engineering perspective that doall the work behind the curtain
to make sure that we can drivevalue for customers.
And what happens is when you candrive Gramps per square foot
production increases, the ROI isone growth cycle for our
(11:36):
platform right now.
So it's really compelling.
But the halt, the center of thatuniverse is the team and their
ability to operate and competein a really, um, difficult and
wild and wooly market, which isthe cannabis market.
Richard C. Wilson (11:51):
Right, right.
Yeah.
Okay.
That makes sense.
I, that's amazing results.
I would guess that even if theyincrease production by 7%, it
would probably more than pay foryour solution
Peter Dougherty (12:00):
percent to them as a million dollars a year on
an annualized basis.
Richard.
And our cost is 50,000.
Richard C. Wilson (12:06):
So if they improve by one or 2%.
Yeah.
Interesting.
Well, uh, that's pretty, prettyenormous potential numbers
there.
And you have a functionalfunctional product though, it
sounds like already you're ableto be beta testing this for some
additional,
Peter Dougherty (12:23):
yes.
So we're in commercialdeployments with a couple of the
large multi-state operators, afew others that we're going to
pilot with and then a bunch ofsingle site operators that are
mostly strategic, uh,implementation.
So what we decided to do, we'vedone tech before and what we
decided to do was build theproduct beta, test it, and then
announce it to the market, notthe other way around.
(12:44):
So it's a commercial releaseproduct.
Now
Richard C. Wilson (12:47):
that's smart.
Maybe that comes from your techbackground and knowing just how
far it is to raise capital andthere's nothing functional yet.
There's nothing proven yet.
There's no track record, there'sno ROI on the people using it.
I mean that is just, it's veryhard to raise capital for
something like that versushaving beta test examples and
pointing to it because thosepeople have to become your
investors first of all.
And then second of all, you canjust have them go visit it like
(13:08):
Michael did.
So everything we've talkedabout, you know, I think that is
very interesting for anyonelistening to this because it's
so aware.
A lot of pre seed companiesdon't have that.
So someone's listening andthey're about to launch company.
I would definitely get somethingcommercially viable before they
raise capital, if at allpossible.
And usually people just have theattitude of, Oh, that's not
possible.
We need to raise 5000001st,otherwise we don't have anything
(13:29):
yet to deploy yet, et cetera.
And it's a chicken and eggsituation that I guess you guys
have been able to navigate.
Peter Dougherty (13:35):
Yeah, it's really interesting because we've
done it before.
The, the majority of the teamworks because they're dedicated
to the idea.
They work for equity only rightnow until we close the series a
and then they go on salary onequity.
So it's, it's sort of the um,uh, the special forces version
of how to start an early stagecompany and get a team that's
(13:57):
dedicated to each other, theideals of what you're going to
build, go out and build it andthen get paid for it, not the
other way around.
Richard C. Wilson (14:05):
Right, right.
Yeah.
That's great.
That's different than how a lotof people approach it.
Yup.
Anything else that either ofyou, one of you want to
communicate during thisinterview before?
I know they've not got a chanceto ask some of the questions you
might have liked me to.
Um, but anything else you wantto address?
Peter Dougherty (14:21):
I'll let Michael go first.
Michael Scott (14:24):
Um, no, let me see.
Anything that's, I'd like toaddress.
I mean, I don't know.
I guess my, my, I just say itkind of a message to investors
is that, um, right now witheverything that's going on, I
know a lot of the world is kindof going in a defense.
I think this is one of the bestdamn times ever to be an
(14:44):
offense.
And I think that the best dealsand private investment, I think
if you're looking at publiclytraded investments, um, you
know, I, I think it's reallydifficult to focus on positivity
during, in chaotic times.
But I think you, um, man,there's, there's just tremendous
opportunity.
So I would just say, you know,for investors, the
(15:07):
opportunistic, I think right now, uh, an investment offering,
you know, like Peter's tech andcannabis or cannabis before all
may not be first thing thatcomes to mind.
But what would you gottaremember is if you pick the
right player, an alreadydepressed market, and then you
take a very nascent market likecannabis, it gets even more beat
(15:28):
up because of the publicutility.
While you're getting someamazing, amazing prices, you
know, and think of logically,people don't think like that,
right?
When a price is going down, theygo, it's junk.
I don't want to go in.
Well I want to, I want to buyit.
When it's going up like this.
Guess what, when your shareprice is expensive, it's the
worst possible time to buy.
Right?
We'll apply the logic of groceryshopping and you know, like if
(15:51):
you see 200 at a discount, itmakes sense to buy twice as
much.
Right?
But people buy that toinvesting.
And so this is why our averagesize, you know, your average,
what we call odd lot investoractually loses it, comes to the
investment.
Again, the vast close to gettingwhat the S and P 500 index will
make.
Richard C. Wilson (16:10):
Right, right.
Yeah, no, that definitely a verygood point.
And I think that's a relevant toanybody listening.
Um, you know, if you have someliquidity or the ability to
invest a little bit, it's gonnaget you a lot more than it will
three years from now.
Assuming things recover or, youknow, 18 months from now when a
vaccine is out and things havemostly recovered, etc.
So, uh, theater.
Anything else from you before?
Peter Dougherty (16:29):
Two things if you don't mind.
One is the reason Michael and Iare working together is because
of the ethos, which with Michaelis approaching the market and
his, uh, ability to dig in, um,do the work and then understand
how to operate in difficulttimes, which is these are the
times to define people and tofind who you are as a person.
(16:50):
I think the most difficultthings.
And then secondly, what makesthis different, what we're doing
right now is the technology thatwe're using to enable these
large operators is a virtualsystem.
So we can operate it where, youknow, the market right now,
there's no travel, uh, nobody'sjumping on planes.
(17:10):
We're doing an installationright now virtually with one of
the largest operators in Canadaby, and everything's going to be
virtual.
So we're literally installing,so we're picking shovel company,
but the picks and shovels arereally data, uh, that travels
virtually.
So it's a great time to be avirtual implementation company
like we are.
Richard C. Wilson (17:31):
Right, right.
Yeah, that's great.
And a subscription and recurringrevenue companies are a hot
thing of the last three to fiveyears.
Everyone's going that directionfrom Microsoft to even our
family office club is, issubscription based.
So it's kind of on point theretoo, which is a great, awesome.
Well then, uh, what would be thebest thing for someone do if
they wanted to reach out tolearn more?
Where can they get ahold of youguys and um, you know, start a
(17:53):
conversation.
Michael Scott (17:54):
So, you know, I mean if they're wanting to learn
just about cannabis investingoverall, when you get in touch
with me,[inaudible] partners.comwould be the best spot in terms
of, you know, finding me and youcan actually learn about Peter's
company either through me and ofcourse, you know, the, the
viewpoint I'm going to do is I'mgoing to, I'm going to share
with you kind of from aninvestors realm, kind of what
you should be thinking aboutboth risks and the reward.
(18:17):
And then either if you want toshare your website out to you
directly.
Richard C. Wilson (18:20):
Yeah.
Orion partners.org.
Uh, O.
R.
I.
O.
N.
okay.
Partners and appreciate theopportunity.
Richard, thank you so much.
Yeah, no problem at all.
And now, once our live eventsstart back up and a couple of
months and the CDC gives us athumbs up and, uh, we'll see you
both, maybe one of those liveevents here, so look forward to
it.
Okay.
(18:41):
Cheers.
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