cannabis entrepreneurs with pranav sood
Toronto native Pranav Sood is the founder of Trellis, a seed to sale, cannabis inventory management solution. Now living in California, we were lucky to catch him while he was in Toronto to discuss the current climate of the cannabis industry from an entrepreneurial perspective.
What is the legal cannabis industry like in Canada vs the US? any big differences?
It’s pretty different. First, looking at the US as a whole is difficult as cannabis is federally illegal, but can be legal at the state level. Furthermore, each state could have medical or adult use or both, so each state really represents its own market. Canada, on the other hand, regulates cannabis federally for medical purposes.
The two markets that we are focused on is Canada and California, and the surprising part for me was actually how similar these two markets are becoming, despite the stark differences in industry structure. Both Canada and California have legalization on the horizon with similar timelines. Both markets have had an influx of quasi legal operators waiting for legalization that are or will soon make the transition to a fully regulated market. Just like most things, there are both similarities and differences.
The growth trajectory of cannabis companies that execute well will outpace similar stage companies in more traditional industries.
What has investor appetite been like for the cannabis industry?
Depends on what stage of financing the company is at. Early rounds, there are plenty of angels that are interested in getting into cannabis. Generally, cannabis does comes with some inherent risk, whether perceived or real, and so cannabis companies sometimes get discounted. I like to look at it the other way around in that cannabis is a high growth industry, nothing like anything we’ve seen in a long time. The growth trajectory of cannabis companies that execute well will outpace similar stage companies in more traditional industries. At later stages of financing, there is definitely a gap across the board, but especially in Canada, for finding VC capital to invest in cannabis. To an extent, most ventures in the cannabis market have not had enough time to demonstrate the scale that most traditional VC’s would look for. So, even at later stages under the current climate, you still need to find investors that are bullish on the cannabis industry. Appetite is increasing and as more markets go legal, increase in size, and operators hit metrics similar to companies in more traditional industries, eventually, there will be no difference in raising capital for a cannabis company vs. any other industry.
What attracted you to innovate in the cannabis industry?
For me it was the overwhelming evidence of medical applications of cannabis and how it can disrupt the healthcare industry. By focusing on the technology side, we are building the tools to help operators produce high quality medicine and get it to patients as seamlessly as possible. With cannabis regulations gaining momentum over the last few years, it was the perfect timing for us to apply all of our previous experiences and skills to build best-in-class solutions for a brand new industry.
Describe a ritual that’s important to you.
Puff puff pass…