Green light for Marijuana companies?
With George Nshanyan

As of February 2019,  10 states have legalized the use of recreational marijuana (in addition to
medical marijuana) for individuals over age 21: California, Alaska, Oregon, Washington, Maine,
Colorado, Nevada, Vermont, Michigan, Massachusetts, District of Columbia.

“I never thought I would even be involved in this industry. Firstly, I do
not use marijuana. In fact, I voted “no” on making it legal for recreational use in CA. So how in
the world did I get involved in all of this…” – George Nshanyan

The legalization of marijuana is a hot topic in the United States. Why
wouldn’t it be? In 2017, Legal cannabis sales were over $10 billion
and sales are estimated to jump up to $25 billion by 2021. In addition
to those sky-high numbers, there is a love-hate relationship that the
world shares with cannabis. Avid users have protested for legalization
which has enabled hungry entrepreneurs to get a piece of this
booming industry. As we know, the cannabis industry is growing
expeditiously with the estimate that it could create 200,000 new jobs by
2020 in the United States alone. 29 states in the US offer some form
of cannabis sales within their borders.

Millennials make up more than 50% of legal cannabis consumers and
account for the bulk of people who are applying for jobs within the
industry. It is common amongst millennials to use online platforms to
find jobs, Glassdoor is an example and according to their data, in
2018, The median salary in the marijuana industry salary was $58,000,
while the median salary for US workers as a whole was $52,000. That's a
difference of 10.7%. It’s a no brainer to opt for the cannabis industry for
most. While Millennials are the bulk users, the older generation is more
likely to consider ‘cannabis consumption’ to be a form of smoking, but
there is a vast market for edibles that is growing rapidly. Gummies,
brownies, chocolate, cake mixes, cookie, and all different kinds of
treats can be made from cannabis-infused butter or oil. The edibles
market is where the cannabis industry could potentially see the most
growth over the next few years. With all the different ways to consume
cannabis other than smoking, we find that there are more people from
the older generation joining in.

As the industry has grown over the past few years, highly successful
entrepreneurs and business professionals have gotten involved and
created million-dollar cannabis companies. One of these successful
entrepreneurs is George Nshanyan, he is someone who does not use
cannabis and even voted against making it legal for recreational use
in California. How did he get involved? Nshanyan is a founding
principal of Green Road Capital LLC, which manages two hedge funds and
a venture capital fund. He has consulted companies on going public, and
before establishing his independent practice in 2015, he worked for some
of the largest financial intuitions in the world, such as J.P. Morgan Chase,
where he managed a $100 million book of business. George says –
“Originally, when Green Road Capital was created, (despite the
coincidentally fitting name), my partners and I had absolutely no intentions
of being involved in the cannabis industry.” Today, however, in addition to
the original portfolio, Green Road Capital offers two additional portfolios,
which both focus on the cannabis industry. One is a venture capital fund,

which invested in privately held companies, and the other is a hedge fund
that invests in public traded companies.

HOW DID IT START?

“It all started with an unexpected phone call!” recalls Nshanyan. Because of
his securities background, owners of a cannabis company contact him for
guidance on whether they should pursue an offer to list their company on a
Canadian stock exchange. This initiated an intensive study on various
aspects of the industry in general, and of course, all of the pros and cons of
taking a cannabis company public in particular. Concluding that it was the
right decision to move forward, he was asked to stay on as an advisor and
be the liaison between the company and the conglomerate putting the deal
together.

“The process of getting a company listed is not complicated,” explains
Nshanyan, “what can be problematic, however, is appeasing individuals
with limited understanding of how capital markets function.” “There were
nasty negotiations, unreasonable expectations, countless breakdowns for
countless reasons, and the deal fell apart several times, and was put back
together again, all to no avail! But, I realized that this was a blessing in
disguise.” Nshanyan says that during the most frustrating times, he
remembers thinking to himself, “I wish I was in charge of this project! I
could do a far better job!” It wasn’t long before it hit him, and that is what
inspired him to start a consulting practice for taking cannabis companies
public.
Cannabis companies who have achieved a considerable level of success
and looking for an exit, will understandably find a merger or acquisition by a
larger company to be easier than pursuing their own listing on a stock
market exchange, even though such a listing may be far more profitable for
the founders. “Small business owners are not stock market experts, and
the number one thing that’ll prevent them from moving in that direction is
the fear of the unknown.” Addressing and alleviating the fears and
complexities of being a publicly traded company will make for more
profitable exits for cannabis founders, reasons Nshanyan.
Nshanyan’s ability to communicate and make complicated financial
concepts easy to understand is what he is known for. With over 15 year’s
experience as an advisor, a Certified Financial Planner ®, he has helped

hundreds of individuals and organizations achieve their financial
success. Perhaps these skills have been honed as they have, as it is at
the intersection of his two master’s degrees – an MBA in Financial
Planning, and an MA in Communications Studies.

You may ask, how is it that Green Road Capital transitioned into offering
cannabis portfolios? Well, while working on the final stages of taking that
cannabis company public – to where they were preparing for raising funds
from Canadian investment banks, Nshanyan observed that the great
majority of listings are done not by IPO (initial public offering) by rather
RTO (reverse takeover), which means a company will pursue fundraising
sometime after they are publicly traded (not simultaneously as with IPOs).
“I saw an opportunity to create a hedge fund that would either participate
alongside these institutional investors on secondary offerings or buy-in
before funds were raised and used by the companies to boost their
businesses.” That was the impetus for the hedge fund. The venture capital
fund came into being soon after for a variety of reasons, explained
Nshanyan. Successful exits are key for venture capital funds, and
naturally synergistic with providing go-public consultation. But more than
that, Nshanyan is passionate about helping small business owners
maximize their success before it is too late. The cannabis landscape shifts
very quickly, explains Nshanyan “One year in this industry is like ten years
in other industries.” “With federal legalization on the horizon, there will be a
shift favoring big business over the little guy,” warns Nshanyan, “small
businesses must plan ahead and act fast – their survival depends on it”
Nshanyan and his team have worked tirelessly to turn Green Road Capital
into a booming business. It has evolved to become one of the most unique
companies serving the cannabis industry. It invests in privately held
companies at various stages, helps them transition to being listed on a
stock market exchanges, and manages portfolios of public traded
securities.

But it doesn’t stop there, Nshanyan is writing an e-book detailing the
investment opportunities in cannabis, and in November 2019, he will be
speaking on stage in Los Angeles, California to over 2500 entrepreneurs
from over 71 countries around the globe. To keep up with George – visit his
LinkedIn. (Don’t believe LinkedIn profiles have a link, do they?)

As we conclude, we can say that one thing we know is that the legalization
of marijuana will be a hot topic for years to come, but it’s safe to say, when
we look at the figures – the cannabis industry does make for a smart
investment!