Ep 275 – Canopy Rivers CEO Reveals the Hottest Segments in Cannabis

narbe alexandrian canopy rivers

By making investments in other companies, large cannabis brands are attempting to capture exponential growth within specific corners of the marketplace.

This not only works to increase ROI for investors, but it also provides these companies the chance to form strategic partnerships with rising startups ahead of the curve.

Here to tell us all about this is Narbé Alexandrian of Canopy Rivers, a cannabis venture capital firm and the $1 billion investment arm of the largest cannabis company in the world, Canopy Growth.

Learn more at https://www.canopyrivers.com 

Key Takeaways:

  • Narbé’s background in cannabis and how he became CEO of Canopy Rivers
  • An inside look at Canopy Rivers and how it works to identify strategic partnerships with Canopy Growth’s large portfolio of companies
  • Vertical integration and why Narbé doesn’t believe in it
  • A breakdown of the thirteen segments Narbé has identified in the cannabis value chain and which ones he predicts will be most profitable
  • Narbé’s advice on the do’s and don’ts for entrepreneurs looking to pitch to investors
  • Narbé’s investment philosophy and what he takes into consideration when deciding where to invest
  • A deep dive into some of Narbé’s biggest investments to date, including PharmHouse and Headset Inc.
  • Narbé’s shocking insight on the falling prices of products including dry flower, isolates, and extracts
  • Where Narbé sees the industry heading over the next few years
Click Here to Read Full Transcript

Mathew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com that's cannainsider.com. Now here's your program. Some large cannabis companies are making investments in other companies to help capture the exponential growth of some corners of the marketplace. This has the effect of potentially increasing returns for investors but also allowing for strategic partnerships to form early with rising stars. Here to tell us all about it is Narbe Alexandrian of Canopy Rivers. Narbe, welcome to CannaInsider.

Narbe: Thanks for having me, I'm really glad to be here.

Mathew: Gives us a sense of geography, where are you in the world today?

Narbe: I am in Toronto, Ontario today. It's getting colder and colder as the days go on, so it's about 16 degrees Celsius, which I don't know what that translates into Fahrenheit but it's probably the first indication that we're gonna be entering fall.

Mathew: Okay. Probably low 60s, I would say, is probably the conversion roughly. But yes, it's funny how we still have this Celsius-Fahrenheit thing, I wish we'd all be on one thing, you know?

Narbe: I know, I know. I actually like the pounds more than the kilos. So I'm kind of a mix up of both the U.S. and the metric system from the U.K.

Mathew: And then when I'm over in the U.K., they say, "Oh, you know, 10 stone," or something like that. I'm like, stone? What's that? You ever had that one?

Narbe: I have no idea how big the stones are.

Mathew: Okay. So what is Canopy Rivers on a high level?

Narbe: So Canopy Rivers was a venture capital affiliate of Canopy Growth. We are the vehicle for them to invest in minority stakes in the company. The way that the company was pretty much founded was from the basis of Canopy Growth looking to make acquisitions within the space, that was back in April 2017. Some folks were open to being acquired, others weren't, so the thought process there was if this is indeed going to be a $500 billion industry globally down the road, there's gotta be multiple winners and strategies and operations that really pave the way. And no government is going to give a monopolistic advantage to a single company, so why not take the opportunity to take multiple shots at net in believing and investing in the long-term potential of this industry?

Mathew: Okay. And can you share a little bit about your background and journey and how you ended up in this space?

Narbe: Absolutely. I got started about a year-and-a-half ago. I've been looking at the space for call it a little over two years now prior to making the jump in. My background has been predominantly in technology venture capital. I spent the last 10 years looking at companies both from mentoring them to investing in them, buying them as well as white labeling some of them as well. So worked a telecom company called TELUS in Toronto and then looked at a bunch of companies through that platform, moved over to the largest government incubator in Canada, which is Mars Innovation. And then moved over to the largest tech VC fund in Canada, which is OMERS Ventures where we did deals on companies such as Hootsuite and Shopify and Way Financial, great successes. Built three funds with the team there. I had a number of awesome exits and really paved the way for venture capital in the tech scene.

Through that whole process, while I was looking at cannabis, it looked a lot like what technology did back in the early 2010s in Canada where you have some very smart operators but not necessarily the best investors in the space and in the sense that because capital is so hard to come by, there's a lot of thorns in every deal for entrepreneurs. So my thought process was if this is gonna be anything similar to the tech industry where the more companies are succeeding, the more money is going to come, the better the deals are going to be for the entrepreneurs, why don't we get ahead of that and build a long-term platform here which helps our portfolio companies grow to become the giants of the future within this industry?

Mathew: Okay. Now, you have a thesis that vertical integration doesn't work. Could you first define what vertical integration is and tell us why you think it's not a model that's viable?

Narbe: So vertical integration is what you're seeing a lot of the large MSOs and the LPs in Canada are doing in the sense that they're trying to do everything from seed to post-sale. So they cultivate, they extract, they formulate, they deliver into products, they create branded products, they sell those products in their dispensaries, they own the entire process from seed to sale.

To us, that is very remnant of what the tech industry looked like back in the early 2000s where if you were...it was 2001 and you were looking to create a surfboard e-commerce store to sell surfboards to the public, you'd actually have to develop everything yourself. You'd have to develop your own payment platform or your own e-commerce site, your own website, your own videos, your own pictures. Again, everything you'd have to do from scratch. You'd have to build your own server farm in your basement to house the input and output of data that was coming through. Everything you had to do on your own.

Fast forward to now and how the internet has developed, you have turnkey solutions for that. So for payment platform, you have PayPal, for any e-commerce platform, you have Shopify, for servers, you have Amazon Web Services. So you have all these turnkey solutions and so you can focus solely on what you want to do and what you want to do best just selling surfboards.

This the same thing can be seen on the cannabis industry for the very large players like such as the Canopy Growths where you have a ton of cash and you have talent all across the board, you can successfully vertically integrate. But for all the small to medium players which represent probably 98% of this entire industry, it's very hard to do so. You're really spreading yourself out too thin, you're trying to build a consumer product for the recreational consumer but also kinda going through clinical trials for the medical and pharmaceutical consumer, it's a very hard proposition to make.

So in our view, as industry progresses and continues to mature, we're gonna continue seeing how horizontal integration is going to come into play, which is companies are gonna be focused directly on what they do best. So what are the one, two, three things that they do very well and outsource the rest of it out. So I like to bring up PAX as an example because it is a common name within the cannabis industry. PAX makes vaporizers, they only make vaporizers, they don't fill the cartridges, they don't sell the cartridges, those are done by their partners. And then they don't actually make the different little piece of the hardware either, they get that from partners as well. So their sheer focus is on developing what they think is the best vaporizer in the world, and it is one of the best vaporizers in the world. So we think that the model of what PAX is delivered it's gonna be what we're going to see more and more of in the future.

Mathew: Now, you've identified 13 segments in the cannabis value chain. Can you tell us what those are and why they're important and how you came up with those?

Narbe: Yes. So through our analysis, we've come up with specific areas where we think that the cannabis value chain really extends into, and it kind of is the seed to sale of what we see in the cannabis industry today. So we start off with cultivation, this is where you're growing product and you're creating dry flower that goes into some other area such as extraction or even goes into a pre-roll. Then we have plant sciences which is looking at how the plant actually grows, fertilizer and agricultural technology, post-harvest processing, which is lab testing, and rolling machines and grinders, etc, extraction, which we all know well about, formulation and delivery, which is where biosynthetics come into play, encapsulation, vaping, software, cosmetics, pharma and biotech, consumer product goods, retail and distribution, and then media technology.

So we like to bucket companies within each of these categories. There's companies out there that do multiple things in multiple categories, which is completely okay, but we like to try to find out what is this company's specialization? Like when you look at the operators of the business or you look at what product traction they've had, in a few words, how do you describe this company? And the reason we do that is because we truly do believe that companies are gonna slowly focus on their strengths rather than try to do too much. So we want to find out what the strengths are and what the barriers are to keep other companies away from that.

Mathew: I often think about the Pareto principle, the 80/20 principle where, you know, 20% of the businesses make 80% of the profit but also 4% of...you know, if you drill on further, 4% make 64% of the profit. If you were to look at those 13 segments, it might change over time but where do you think in those 13 segments are the 4% that'll make up 64% of the profit, kind of like Apple does in the computer space?

Narbe: I'd say it really depends on the maturation of the market. I think that, in general, the market rolls around in five specific waves. The first one is cultivation and extraction. This is where you see a lot of value on early license holders of domestic cultivation within those countries. They can ramp up quicker than anybody else can, build out their facility, which takes anywhere from a year to 24 months and they can get the ball rolling. And that's where you see a lot of value there.

As the industry continues to mature within that geography, we move on to the ancillary industry, which are technologies and software and extraction and different formulation methods that really help the cultivation of just dry flower turning into an actual product. Then we move into consumer packaged goods, which we know well about, which are the products that consumers buy at the stores today. And the fourth wave would be pharmaceutical, which we believe the medical market is gonna be the biggest one, we just don't have enough clinical data for the large players to jump in and make a big splash.

And then the fifth wave is maturation, which we think is about 15 years from that standpoint. So to answer your question, what we believe is the hottest segment today really depends on the geography. If you're looking at North America, I think you want to really focus on the brand part. There's a lot of products that are entering the market today. Our analysis shows those are about 90 different SKUs, SKUs that are coming into the North American market per week. And so there's a lot of noise and there's a lot of companies developing product.

Right now, everything looks like a Sears catalog that there's no real differentiation, When a customer goes to the store, it's one vape or for the other vape, it's one dried flower or the other dried flower. There's no real brand value behind any of these companies yet and that's what everyone's racing to become. So that's probably what we want to see in the North American industry. When you go to Europe, you are all the way back to the beginning where it's the cultivation and production and the licenses that are playing out within those jurisdictions.

Mathew: That is interesting how that unfolds. How many pitches do you hear each year?

Narbe: So we have a very robust system of capturing the details of the conversations that we have. Over the last 365 days ended June 30th, we saw 1,523 pitches. So these aren't emails that we just put in our database but these are actual conversations we've had with entrepreneurs. And we make a very strong push towards having those conversations because there's no better way to learn about how this industry is moving forward than to get into the front lines and talk to the soldiers out there that are trying to build something within this industry.

So you hear about their pains, the problems that they have, what are the successes that they're seeing, how they characterize their competitors, what type of metrics that they think are key performance indicators. And through those conversations, you can truly understand how things are playing out. And I think that until you get to...I mean it doesn't have to be 1500-plus but at least to get up to a thousand companies under your belt, like you won't really understand how this industry is moving and what deals make sense and what deals don't make sense and where the...I'm gonna use a Canadian analogy here, where the puck is going versus where everyone else is playing at.

Mathew: Now, what do you think...since you've heard so many pitches, is there something that entrepreneurs think is important to talk to investors about but realize not that important and then conversely that is important that they generally don't mention and without being asked?

Narbe: Yes. I think the biggest piece that they always talk about, and I have a bunch of pet peeves probably of how entrepreneurs pitch, but the main one is talking about how big the industry is going to get. And when you're talking to an entrepreneur, especially us, that are synonymous with the cannabis industry, we know how big this industry is going to get it, we know it's gonna be a multi-billion dollar opportunity in the future and we're long-term thinkers here as well. We're not the type of people that want to put money down and talk about how long-term this industry is and then force the company to go public too soon. Instead, we're always thinking about how can we build a billion-dollar business out of all of our portfolio companies and build that out? So when you're pitching, like don't talk about how big the industry is going to get, skip that slide, save your time and talk about something else.

The one area that I wish more entrepreneurs would talk about it would be to skip the pitch part of the pitch and focus on what they're seeing in their space. So if you are a German cultivar or Italian cultivar and you're talking to an investor, don't assume they know all the details, the regulations, and the different parties politically because it is a lot of information for everyone to keep in mind. So to really stand out there, take some time and just educate your investor on the opportunity in that space. So if you're creating a brand in California, explain to them the number of brands that come out of California outside of cannabis and why that is so. It's because there's a lot of talent there, it's because there's a huge population there that you can service. So to stick to what you're good at and show that opportunity out there instead of focusing on the larger macro-level numbers.

Mathew: Okay. And can you give us some examples of how your investment philosophy has guided you in your investments?

Mathew: Absolutely. So our investments are based on a thesis-based approach. So we break the value chain up into 13 different buckets, we break that down further into 97 sub-segments. And each of those segments, we apply a 10-criteria basis to it. So it includes stuff like competitive rivalry, bargaining power of buyers and suppliers, barriers to entry, how big the market size could get, what exit potentials look like, what the internal capabilities are at Canopy Rivers through our ecosystem approach, all the way up to how can Canopy Growth actually help this company out potentially down the road?

So we do that assessment and out of those 97 sub-segments, there's about 12 to 15 areas that we do a deep dive on. The three that I like to disclose openly would be...one would be on brand, the second would be on biosynthesis, which is the creation of cannabinoids through labs, and then the third piece would be on the plant science piece, which is really truly understanding how this plant grows and how we can better understand how to keep it away from pests and microbials and all the bad things without actually messing around with the genetics of the plant itself.

Mathew: Okay. And you mentioned you take a minority stake but how much do you generally invest? What's the average check size?

Narbe: So we've invested anywhere from a million dollars to $50 million in any single round. So our check sizes do vary. We like to call ourselves lifecycle investors because through our domain expertise, we can see early companies evolving and us understanding how we can help them become bigger companies, and so through that process, you can get it for a bit cheaper through the valuation. So I'd say a typical check size is about $10 million to $15 million per portfolio company. And so it might be a little bit at the beginning but there's a milestone approach to putting more money into the company and growing that out.

Mathew: Okay. And what are some of your more noteworthy investments that you can share?

Narbe: So there's a number of them we can talk about. Farmhouse is one of our largest investments to date. Farmhouse is a joint venture between the Mastronardi [SP] produce family, the principles behind it, which is the largest greenhouse operator in North America, and Canopy Rivers. And we've developed a 1.3 million square foot facility based in Leamington, Ontario, which is the same longitude as Northern California that they cultivate the cannabis. Fifty percent of that cannabis has already been taken up by companies such as TerrAscend as well as Canopy Growth and 50% of it is still available. So this is going to be one of the largest and most highly automated facilities in the world. And we have some of the best-in-class operators to run this company.

I was actually speaking to someone this morning and I was mentioning Farmhouse and when we first brought Farmhouse into the picture and we were walking them through cannabis cultivation, and think of this group as being...they are the multibillionaires, multigenerational in terms of families that ran the company. And they look at cannabis cultivation and they said flat out, "For the first two years, you'll teach us how to cultivate cannabis and then after that, we'll teach you." So that's a very powerful message that we received.

Mathew: Any other noteworthy investments?

Narbe: Yes. So one of the investments I love to talk about a lot is Headset. And Headset, as many of you know, it's a data platform. And Headset originally came from the investment thesis of there's not enough data for brands out there. So we were walking through MJBizCon last year, which is one of the largest, if not the largest conference in the cannabis space. And some of the companies out there were showcasing some of the flavors they had, it was all uninfused.

So we tried one, which was the second-largest beverage manufacturer in all of the U.S. for cannabis. There was a blueberry soda, it tasted extremely sweet and very artificial. So we asked them how things were going with the flavor and they said, "Couldn't be better, it's flying off the shelf, we're doing very well." So we asked them how they came up with the flavor and their response there was they had this fantastic agreement with the flavor house in Kentucky and the flavor house sent them blueberry cola, they infused it with cannabinoids and now they're selling and it's doing very well.

To us, that was very counterintuitive to all the conversations that we've had with large CPG corporates that are out there that take about two years to formulate and understand consumer trends before they launch a product. So we saw that the cannabis industry really upside down, companies were just developing product not really looking at why they were developing it or what the trends were showing, so we went out to find data. We spoke to Nielsen, Nielsen didn't have any data on the cannabis space at the time. So we started talking to cannabis companies and any company that had the word data in their title and their mission statement, we went and talked to them. So we talked to about two dozen companies and through that entire process, we kept bumping into Headset.

And Headset was founded by the three co-founders of Leafly, which is the most successful exit on the technology space and cannabis to date, they sold to private tier. And right after their earn-out they went and started this data company that pulls in data from 20 point-of-sale providers, which represent about 90% of the entire industry to date, and take that data and show brands, hedge funds, traditional CPGs that you might not even think are looking into the space, but they are, how things are moving in the cannabis space. So at any given time, I can find out in real-time what is selling in what states or what province and what SKU and what flavor and what CBD to THC ratio that exists there. And that's a lot of powerful data for any brand manager in any cannabis company to understand what to create next.

So for example, one of the findings that we've recently found out is when we are looking at CBD to THC ratios and you're selling CBD products, whether they be through dispensaries or through traditional channels, consumers, for some reason, are choosing the 9 to 1 ratio way more than they're choosing the 10 to 1 ratio. This is a negligible difference in terms of amount of CBD in the product to THC, but it just shows how consumer psychology works. And it might be the consumer it looks at and says that 10 it looks like a big number but 9 doesn't look as big because it's a single-digit and that's driving their pattern there. So to try to understand that, try to understand how to build a product based off that data is a very powerful barrier to entry for any company out there.

Mathew: Wow. That makes sense. These little psychological nuances, double-digit versus single digit, that's funny. Now, you're really deep into this world of investing and talking about all these different investment philosophies. What skills from your background do you draw on most day to day that kind of help you do your job and give you kind of a lens that you can quickly zoom in and zoom out and, you know, make decisions?

Narbe: I think the biggest skill set, it's a soft trait, and that's to play the long game. So when we're talking to companies, a lot of times it's not the right time for us to invest. And that just could be the company's too early, it hasn't shown enough traction, the valuation is too high, or it's a space that we're not generally too bullish in. And in those situations, you have to treat the entrepreneur with so much care because at the end of the day, it is their baby and they've devoted a lot of time, energy, they've left their previous job at a big corporate to go launch something. So you don't want to treat them without the respect they deserve.

So in these situations, a lot of times what you want to do is you want to create a narrative around the company. So that might not be the right time for me to invest right now but maybe in six months or a year and a year-and-a-half they get there, and companies pivot all the time, companies change up every single time. Shopify was one of my portfolio companies back in my technology days. Originally, the company was created, it was a snowboard e-commerce store.

Mathew: Snowboard?

Narbe: Yes, exactly. And that turned into becoming a $30 billion company because they pivoted to saying, you know, "Instead of selling snowboards, why don't I just sell my platform that I created to sell the snowboards?" So the same thing happens in the cannabis space. So before anybody jumps to any conclusions saying that, "Well, this company will never make it," or, "We shouldn't do that," don't take that approach, and takes the long-term approach of saying, "It might not be now, it might be later, but let me just understand how this entrepreneur thinks of their piece of the industry, what are they seeing, what are the trends happening from regulatory perspective that could help me in my future?" and create that rapport with them.

And any deal that we do take to our investment committee comes with months and months of discussion with entrepreneur. Because at the end of the day, the relationship between a VC and an entrepreneur lasts almost a decade. On average in the tech industry, it's about 9.6 years. The average marriage in North America is about 10.1 years. So you're basically getting married to someone and you just can't jump to elope within the first phone call.

Mathew: That makes sense. Okay. So you talked about, you know, where the puck is going. When you think about the cannabis industry and how it's evolving, is there anything that you're thinking about that would surprise investors and people in the space that is not really on the radar yet that they might not be aware of?

Narbe: Yes, and I think one of the things that's rarely talked about is how quickly prices are going down for dry flower as well as for islets and that an extract. You're seeing so many companies coming online right now growing hemp and growing cannabis and it's really moving the entire North American industry pretty quickly. For a lot of these players, especially the small ones, they're slowly gonna get out-positioned because of the difficulties in scaling. So you have to really pick and choose the area that you want to focus in on. Are you producing for mass product? Are you going for the lowest cost? Are you are applying some tender love and care TLC to the plant to create craft cannabis, high-premium type smokable flower?

And you had to pick and choose where you're gonna be. For a lot of the companies in the space and a lot of investments that I see other companies are making, they're just picking a certain geography and finding a player and going after it and not necessarily thinking about what the product looks like, what the genetics look like, how the company can actually weather a storm of commoditization of a product, if and when both cannabis and hemp become further commoditized.

You look at the prices today, extracts are going down by low teens per month, the dry flower is going down by high single digits per month. So within 12 months, you would be looking at cutting that price in half. When is that going to stop? We don't know. So that's an area that we really do try to keep a very close eye on because, for example, in Canada, by 2021, we're gonna have an oversupply. And then once we have an oversupply, what happens there? Our international market is going to open up for export? Maybe, maybe not. And if they don't, what companies are gonna survive and what do you have to do in that day and age to be a viable partner for anybody trying to build a brand or trying to buy dry flower from someone?

Mathew: Good points. I do think about that a lot, it does seem like it's rapidly declining and if you're just kind of a middle of the road, not sure what your value proposition is or your skillset, it's just like, man, you're just going to get bounced out.

Narbe: Absolutely. Absolutely.

Mathew: So Narbe, let's go to some personal development questions here to help the audience get a better understanding of who you are as a person. Is there a book that has had a big impact on your life or your way of thinking that you'd like to share?

Narbe: Yes. Definitely, there's a book called "The Defining Decade." I read it when I was in my 20s, so it was a while back. And it's all about the snowball effect and just taking life by its horns and try to do as much as you can with it. So the book is actually written by a clinical psychologist that focuses on 20-something-year-olds. And that's an area where you just don't see that much research dollars going into because, knock on wood, 20 something-year-olds are very healthy both mentally and physically so there's not a lot of money that goes into that.

So her life work is on understanding 20-something-year-olds. And for lot of the adages that she talks about, and she brings up anonymously a lot of her patients, a lot of folks believe that they have a lot of time to do X, Y, and Z but, quite frankly, you need to really take every day as if that was your last day and do everything you can in that scenario. And after reading that book, that really opened my eyes to how much you can actually fit into a 24-hour day. So every day someone mentions to me how I juggle so many different things at work and at home and all these different things and, quite frankly, I can attribute it to that book and how it opened my eyes.

Mathew: You know, I think about this too but then I think most of the things that I do don't mean anything. Like 10 years from now, I won't even remember a few things about this year even, and those things that stand out are probably the things I wish I enjoyed more. So how do you make sure that you're doing something that's truly impactful versus kind of busy-ness or something that feels like it might be impactful but then it's not, or you get drawn into something that's not impactful? I mean, how do you kind of navigate those issues?

Narbe: I mean, at the end of the day, you have to do what you love to do and you have to find your passion. I used to be an accountant, a CPA back in the day, and I hated it, I hated that world altogether. And after reading that book, I took a step back and said, what do I love? I love technology, I love looking at different business models. And I got into the VC space. This is pre-cannabis actually going anywhere close to legalization. So I jumped into that space and I went to work there. And every once in a while you ask yourself, am I enjoying what I'm doing?

And the book itself also talks about the snowball effect of every conversation you have and everything that you do might turn into something in the future, which you can't even fathom, but in hindsight, it's 20/20 and it make sense. So whether it be, for example, I went to a party once that none of my friends were going to, but I had nothing else to do in that day and I met my wife there. And I would've never imagined that one conversation I would have would end up being my partner for the rest of my life. So it is about just taking those chances and just showing up.

Warren Buffet talks about luck all the time, he says, "Luck is made up of true two attributes, one is the ability to see opportunities and the ability to seize opportunities." And I think that's quite true. If you stay at home, stay on the couch and watch an NFL game and bet 100 bucks on it, you're probably gonna end up wasting 3 hours in your day and maybe you make 200 bucks off that but you're not really going that far. But if you go and apply yourself and consistently want to learn, there's a lot you can do in this world.

Mathew: Great points. It reminds me of some other technique I use where I do something that's uncomfortable but turns out having an impact down the road in ways you can think of. Whenever I go into a room or a party where I know a bunch of people, I try to find someone I don't know that looks like they're not talking or not engaging and just walk up and introduce myself. And usually those people have something interesting to say, it's just that we kind of default to the familiar, like, hey, I know these two people over here so I'm gonna go over there and catch up on, you know, whatever, and that has had a tremendous impact for me. But it's slightly uncomfortable to go up to people you don't know and just start talking to them.

Narbe: Absolutely. I love that, I love that comment that you made as well just because I think it's a defense mechanism of ours to go after what's comfortable. And if you go out there and tell yourself I need to go seek discomfort, I need to seek those scenarios where I have butterflies in my stomach and I just do it over and over and over again until those butterflies go away and then I find the next thing, you just keep on growing and it never stops. And then you get it becomes a bit of a game for you in the sense that you're always trying to find what that next big thing is.

Mathew: Now, what do you think is the most interesting thing going on in your field besides what you're intimately engaged with?

Narbe: I think that the aspect of biosynthetics is something that I'm very keen on understanding more. At Canopy Rivers, we've talked to probably four dozen companies both in the cannabis space that are developing biosynthetics as well as in the non-cannabis space that are developing food ingredients or synthetics or biosynthetics to truly understand what that path is to create lab-developed cannabinoids that are still organic in nature and still as good for you as the actual plant itself. So really diving deep onto that. And from our understanding, it's gonna take a few years until we get there but there's some really cool technologies that are coming out from some very well-known academics all around the world that are really gonna push the boundaries of what we understand about these cannabinoids.

Mathew: You know, here's the Peter Teal question for you. What is one thought that you have that most people would disagree with you on?

Narbe: I'm not a big fan of retail within the cannabis space. There's a lot of folks that are putting a lot of money into dispensaries and retail. To me, that is a short-term solution. At the end of the day, retail stores for cannabis are gonna end up going down the path of the dry cleaner model. You're gonna go to what's closest to you, not necessarily what has the best selection. And you see that in the liquor space. When you're trying to buy a bottle of wine, you don't drive 10 miles to go to that one liquor store that has all those vintages that one might want. Sure, there's a niche for that, of course, which is the connoisseur, but for the most part, we all go to the one that's closest to us because it's convenient.

And if you look at it from a convenient model, then it's all about location, where those locations are. But at the end of the day, every retail model has a cap on how much money they can make because there's just only so much traffic that can walk through your store in a single day. So I just don't see the retail model really playing out from a venture returns, so you can't really get that much of a bang for your buck in terms of investing. I do think retail has a lot of the importance for large companies that want to showcase their brands. So I do believe in specialty retail where you have Canopy Growth creating tweet [SP] stores that sell Tokyo [SP] smoke and tweet products and really showcase the brand and the messaging the way they want. But for the most part, the ones that are selling everyone else's product, it's a race to the bottom.

Mathew: Okay. Narbe, as we close, how can listeners learn more about Canopy Rivers?

Narbe: You can go to our site, www.canopyrivers.com. You can check us out on a bunch of different publications that were on. I'm always trying to find ways to talk about all the insights that we get from our 1500 pitches that we've seen. And we just announced yesterday after market closed that Canopy Rivers is actually going on to the TSX, so we graduated from the ventures platform to the TSX, so we couldn't be happier with that. And hopefully, through that process, we create more awareness for our company and our investors through the TSX big board.

Mathew: Right. And for people not familiar, that's the Toronto Stock Exchange.

Narbe: Yes.

Mathew: Great. Narbe, thanks for coming on, we really appreciate it. I'll let you go so you can go squeeze more into your day efficiently.

Narbe: Thank you so much, I really appreciate being a part of this.

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