{"id":5292,"date":"2022-04-06T14:00:00","date_gmt":"2022-04-06T14:00:00","guid":{"rendered":"https:\/\/cannabisnow.com\/?p=59511"},"modified":"2022-04-06T14:00:00","modified_gmt":"2022-04-06T14:00:00","slug":"cannabis-investor-sees-strength-in-numbers","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=5292","title":{"rendered":"Cannabis Investor Sees Strength in Numbers"},"content":{"rendered":"

In 2016, the NFL Players\u2019 Association reported that the average career lasts 3.3 years. Of those players, 78% would lose all their career earnings within three years of leaving the league. Matthew Nordgren would play just two years as a backup quarterback, but he wouldn\u2019t go broke post-retirement. Instead, as the founder of venture capital (VC) cannabis investing firm Arcadian Capital, Nordgren and his team are helping grow the industry\u2019s ancillary, or non-plant touching side, of the market.<\/p>\n

Since launching in December 2017, Arcadian Capital<\/a> has amassed a range of significant cannabis industry investments. The firm\u2019s investment process is billed as being \u201cpredictable, scalable and profitable.\u201d The company has had activity in numerous ancillary marijuana sectors, including tech services, media, e-commerce, consumer product platforms, agricultural tech (agtech), life sciences and supply chain, among others.<\/p>\n

\u201cWe\u2019ve had a lot of success, and there\u2019s more work to do,\u201d Nordgren said, adding that Arcadian\u2019s leadership, comprised of professionals with institutional and family office investor backgrounds, is \u201cdesperately looking for quality\u201d and often aligns with plant medicine and innovators advancing the space.<\/p>\n

Nordgren says his unique experience performing at a high level as both an athlete and investor has given him a valuable perspective for overseeing Arcadian Capital\u2019s growth.<\/p>\n

With previous success in sports and entertainment VC firms, Nordgren may have the pedigree to do the same in cannabis. While possible, the firm\u2019s founder doesn\u2019t seem to harbor a desire to be seen as the best. Instead, his focus is on building up the emerging market in a communal fashion.<\/p>\n

Going From Gridiron to Cannabis Investing<\/strong><\/h4>\n

Since his college days, Nordgren knew he wasn\u2019t destined for a Tom Brady-esque career in the NFL. He always focused on a future away from football, earning his bachelor\u2019s in government and business from the University of Texas at Austin in 2006. While at UT, Nordgren spent five years watching and managing the game from the sidelines. He\u2019d dabble in the pros afterward, playing stints with the Detroit Lions in 2006 and the Philadelphia Eagles in 2006 and 2007. Never starting a college or pro career game helped shape his perspective and business acumen. <\/p>\n

\u201cYou learn servant leadership when that happens,\u201d he said of his career, laughing. \u201cI think that makes for a great investor.\u201d<\/p>\n

From 2006 to 2017, Nordgren worked with several management funds, consulting firms and capital partners, as well as with other offices in Texas and California. He honed his investing expertise along the way, focusing his attention on sports and media assets. His first cannabis investment opportunity was with the cannabis publication High Times<\/em>. With a foot in the industry, he began attending cannabis events to conduct due diligence. The research revealed just how ample an opportunity cannabis could be, all without ever handling pot.<\/p>\n

\u201cWe started to see if there was an opportunity to invest in the growth of this industry by not touching the plant,\u201d he said.<\/p>\n

Ancillary Solutions Providers Can Sustain<\/strong><\/h4>\n

Nordgren\u2019s findings proved vital in convincing investor bases to join the then-new cannabis industry. By investing in ancillary companies, investors could see potential gains from the nascent cannabis market without the risks attached to cultivators, dispensaries, processors or other pipeline components.<\/p>\n

This discovery led to early investments in companies the firm saw as the market\u2019s solutions providers. Arcadian Capital\u2019s early investments included data firm BDS Analytics (now BDSA) and cannabis software developer Baker Technology (now part of Tilt Holdings Inc.).<\/p>\n

State-by-state regulations are another concern for plant-touching ventures. With each state allowed to make its own rules, cannabis-handling companies are subject to various regulations. US brands also need to obtain licenses to operate in each state. With ancillary products, companies don\u2019t face the same level of regulatory scrutiny, or the need for multiple state permits. The lessened risk appeals to investors like Nordgren, who prefer companies that serve the market on a national level.<\/p>\n

\u201cThey\u2019re not dependent on one state or another,\u201d he said.<\/p>\n

In addition to providing national solutions, Arcadian sought out qualified leaders when choosing its initial early-stage investments. An emphasis was placed on companies led by passionate, high-character entrepreneurs with a history of creating solutions in other industries.<\/p>\n

\u201cI think character and passion are a big piece of that success because when you\u2019re investing early, you don\u2019t know as much,\u201d Nordgren said.<\/p>\n

Those intangible assets would prove critical in the cannabis space, where regulations are constantly changing. Companies had to provide solutions and show that they could do so for the long, winding haul of cannabis reform. According to Arcadian Capital\u2019s website<\/a>, companies must meet the following five-point criteria to qualify for their portfolio\u201d<\/p>\n