InSpire Writes for Cannabis Business Executive on Mitigating Risk in Cannabis Investing

27 April 2020 /

InSpire CEO Adrian Giovenco recently published an article in Cannabis Business Executive: “Tips for Investors to Mitigate Risk in Cannabis Cultivation.” Cannabis Business Executive is an online publication dedicated to providing cannabis industry leaders with the expert information they need to help them run their cannabis businesses successfully. CBE distinguishes itself as the premier authority working to advance the cannabis industry by developing original content, aggregating news content, and partnering with recognized industry experts. In addition to its online publication, CBE distributes email newsletters to more than 50,000 subscribers each week.

“Tips for Investors to Mitigate Risk in Cannabis Cultivation” discusses some of the key steps investors can take and some of the most important questions investors should ask prior to making any commitments. The cannabis industry is extremely fast-paced and dynamic, and the investment process isn’t the same for any two investors. It is becoming increasingly important for investors in this space to execute due diligence – especially when it relates to operational evaluation and facility assessment – to mitigate risk and protect their assets. 

Some of the advice explored in the article:

  • Gain intimacy with the cannabis industry before you invest
  • Understand the goals of the company you’re considering
  • Get to know and trust the people with whom you’re going to do business
  • Build an ecosystem of experts and engage them early
  • Take a holistic approach to understand how each decision impacts the bigger picture
  • Get cash-flow positive as soon as possible in order to grow

Some of the important questions to ask include:

  • How will the changing tastes of cannabis consumers and medicinal products impact your operating strategy?
  • What is your specific business model?
  • Have you watched the actions and choices made by your future business partners under pressure?
  • Have you walked through a facility previously designed by your team of experts and gathered feedback from past clients and partners?
  • What cash is being generated in each phase to fund future phases?

The article also explores the impact environmental control has on business performance and why this should be an important factor for investors. Environmental control directly impacts all of the KPIs involved in cannabis cultivation, including growth trajectory, business performance and the bottom line. If the systems in a cultivation facility are not properly controlling the environment, the potential of the business as a whole will be limited.

An intimate knowledge of the industry and a nuanced approach to understanding how all of the systems involved in a cultivation facility work together will allow investors to mitigate risk and ensure business profitability. Executing due diligence prior to investing – especially when it relates to environmental and cultural control considerations – can make or break whether or not investors see a return on their investment.

To read the full article, visit: https://www.cannabisbusinessexecutive.com/2020/04/tips-for-investors-to-mitigate-risk-in-cannabis-cultivation/.

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