MJBizMag October 2021 - 96

UNDERSTAND YOUR INVESTOR
INDIVIDUAL INVESTOR
OUTSIDE THE FAMILY
Founders work hardest when deal structure is mutually beneficial,
former family office executive says
By Omar Sacirbey
Ryan Ansin
Former president of the Family Office Association, co-founder and chief strategy
officer of Revolutionary Farms, a vertically integrated business
Boston
I
nvestor Ryan Ansin estimates that
only 10% of companies have the right
management team in place. After
starting to explore cannabis investing
in 2014, he has invested in 13 planttouching
and ancillary companies.
" It's no different than any other
industry. Have these people worked
together before? Have they been in the
foxhole before? " Ansin said.
As a limited partner in two cannabisfocused
funds, he added that sometimes
founders must make personal sacrifices
for the good of the company, such as
temporarily forgoing pay.
" How many months or years could
they go without a significant salary? A
lot of people don't think about that. They
think, 'There's a big opportunity, I should
jump in,' " Ansin said. " I get nervous
when people think like that. "
DEAL STRUCTURE
How an investment is structured can also
persuade or dissuade Ansin to invest.
" The structure of the investment
and the regulatory environment tells
me whether or not you have a great
likelihood of getting your principal
back, " he said.
94 MJBizMagazine | October 2021
Ansin said he looks for cultivation or
manufacturing assets structured in a way
that is acceptable to the entrepreneur,
" because you don't want anyone to stop
working for themselves. " He also wants
a transaction to be crafted in a way that
covers his investment and reduces the
risk of the deal heading south.
With the goal of " getting our capital
back within one to three years, " Ansin
said he might invest in real estate, equity
or warrants " in order to participate along
the way and in order to kind of unlock
growth opportunity at each step. "
THOROUGH OR SLOPPY?
Like other investors, Ansin visits the
facilities he considers investing in, and
along with interviewing management, he
looks for clues about how thorough and
careful the operation is.
" You can look into the future of problems
when you're on-site. Do they have
big rooms? Do they have small rooms?
What are their ventilation systems like?
What are the materials? ... All of these
different things tell me a lot about how
thoughtful they've been and where their
brains are as it relates to CapEx mitigating
future problems and OpEx, " Ansin said.
STATES AND MARKETS
Ansin said he prefers companies in limitedlicense
states in the East. He has made
investments in Maryland, Massachusetts,
Michigan, Ohio and Pennsylvania.
" We want markets that are limitedlicense-either
by the law and regulations
or by the geography. Massachusetts is not
a limited-license state. But it is a NIMBY
(not in my backyard)-attitude state, "
Ansin explained. " Where Oregon and
Colorado might have had a few hundred
outdoor grows, " Massachusetts has fewer
than 10, and they are all 2.5 acres or less.
" And while there will be more market
entrants, there are still far fewer acres
under cultivation here, and therefore you
don't have cannabis prices being driven
down the way they are out West. "
MJBizMag October 2021

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