Excerpted from an article in the International Business Times about the growth of the marijuana start-up scene in the USA.
Holly Alberti-Evans considers herself among Colorado’s marijuana business success stories. Healthy Headie Lifestyle, the in-home direct sales company for cannabis products she founded with her husband, Steve Evans, is growing, with a busy office in Boulder and an expanding team of independent distributors who demonstrate vaporizers to those Alberti-Evans calls the “canna-curious” in the privacy of their homes. (Hosts provide their own marijuana if they want to take the devices for a full test drive.) What’s more, Alberti-Evans is constantly fielding calls from those wanting to invest in the enterprise.
“We have had an overwhelming response,” says Alberti-Evans. “There is absolute excitement around our business model and everyone wants to participate.”
Rewind to two months ago, and Healthy Headie Lifestyle looks very different. In late June, the company has no office, very little money and everything is resting on Alberti-Evans’ ability to sell her company in the briefest of terms to potential investors in a cavernous conference hall.
“We are the Mary Kay of Mary Jane,” she says, leaning forward and aiming her thousand-watt smile at a couple of well-dressed businessmen sitting across from her. It’s Day One of an investor pitch forum organized by the ArcView Group, one of the biggest names in venture capital funding for cannabis startup companies. The event begins with a “speed dating” activity, which means Alberti-Evans has just a few minutes to recite her well-honed spiel and hand over her business card (one businessman offers her a cannabis vape pen in return) before the bell rings.
Then it’s time for Alberti-Evans and her fellow marijuana entrepreneurs to switch seats and continue looking for potential investors willing to bankroll their dreams.
“I am feeling fantastic,” says Alberti-Evans in between speed-dating rounds. But there’s a hint of stress in her voice. As she navigates the cavernous conference hall, moving from one table of investors to the next, she glances around the room, trying to distinguish the big financial fish from the others.
Healthy Headie Lifestyle was one of 10 nascent companies chosen from more than 100 applicants for the first class of CanopyBoulder, a new-business accelerator that’s the first of its kind focused on the cannabis industry. Based on ballyhooed tech accelerators like Techstars, the idea behind CanopyBoulder is to fuse great marijuana business ideas with much-needed financial acumen.
For 13 weeks, Alberti-Evans and her fellow classmates received a crash course in developing and launching a marijuana business. And now, as the group’s final test, it has all come down to whether they can win over investors here at the ArcView event and at a similar pitch forum at a Cannabis Business Summit in Denver several days from now. It’s like “Shark Tank” for the cannabis industry.
The speed-dating scramble encapsulates the promise and peril of the cannabis startup scene. As an increasing number of states legalize medical and recreational marijuana, entrepreneurs and investors see a lucrative new business opportunity. The cannabis industry grew 74 percent in 2014 to $2.7 billion and is on track to hit $11 billion by 2019, according to San Francisco-based ArcView, whose 480 member investors have pumped more than $40 million into 70-plus companies since its founding in 2010.
For many of the CanopyBoulder companies, there’s more than just a financial incentive behind the hard work; it’s also about legitimizing cannabis use through lawful business ventures. Healthy Headie Lifestyle’s Alberti-Evans and her husband helped lobby for the passage of Massachusetts’ medical marijuana law in 2012 while running a commercial painting company in Plymouth, then launched their in-home demonstration company for local medical marijuana patients two years later.
“The reason we started this company was I didn’t want someone selling snake oil to someone who is dying,” says Alberti-Evans. With a year of sales under their belt, the couple drove to Boulder packed into a Subaru with their two Healthy Headie employees, and since then the four have been sharing a rental house and living off supermarket pizza slices. “It’s like the Real World without the cameras,” she says.
“We’ve found there is a huge demographic of individuals who are not being taken care of, grandmothers, corporate executives and the entire baby boomer generation, which, Alberti-Evans points out, controls 70 percent of the country’s disposable income. “They are canna-curious,” she says, “They are looking for that education. They are looking for that information, and they want it in a safe, comfortable environment. And why not do that right in their home?”
Alberti-Evans hammers home the opportunity for in-home direct sales of marijuana paraphernalia: In 2014, one in eight households engaged in direct selling. When Healthy Headie Lifestyle recently launched a pilot program, in four days it received more than 500 independent distributor applications from 45 states and Canada, with each applicant willing to purchase at least a $600 sales kit. And last year, while running the company on a part-time basis in Massachusetts’ limited medical marijuana market, she and her husband generated $50,000 in revenue.
From the investors’ perspective, Healthy Headie Lifestyle is among the standout prospects. At the end of the ArcView event, Alberti-Evans is awarded a glittering rainbow-colored glass trophy — the prize for best company pitch. Soon that award is backed by dollars: Now Healthy Headie Lifestyle has nearly reached its half-million dollar funding goal.
Between courting potential investors and organizing business events, the company is hosting a free party in Denver on Thursday to lure potential customers and distributors — and helping to run in-home demos (a room full of 40-something Boulderites got hands-on training in how to use marijuana concentrates at a Healthy Headie event two weeks ago), Alberti-Evans is as busy as she was while at CanopyBoulder. The whole process is super stressful, she says. There is definitely a rollercoaster effect.
Still, Alberti-Evans knows her work is just beginning. While she might have perfected pitching her company, she still has to build it. And in the cannabis industry, even the best-laid business plans don’t always develop as expected. “We are looking forward to the journey,” she says. “We have a long road ahead.”