Matthew Nordgren, Founder and CEO, ARCADIAN Fund
Matthew Nordgren is an ambitious executive, dedicated philanthropist, and accomplished athlete who brings a unique passion to creating strategic alliances. He brings breadth and depth of experience in finance, corporate development, and capital sourcing, as well as in building highly motivated teams of skilled professionals.
Mr. Nordgren is currently CEO and Founder of ARCADIAN Fund and ARCADIAN Capital management, a venture fund focused on the ancillary service providing companies in and around the cannabis and hemp industries. More specifically, on Series A type opportunities where proven businesses are looking for growth equity to attack and win new markets. He was recently named one of the “Top 100 Most Influential People in the Cannabis Industry” by High Times Magazine. Additionally, he is the founder of NORDCO Consulting LLC, a private equity firm dedicated to buying and selling middle market companies with forward-thinking vision. To date, Mr. Nordgren has personally managed over $7 billion in transactions and maintains a portfolio of approximately 25 companies.
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now, here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Are you a CEO looking to scale your company faster and easier. Checkout Thrive Roundtable thrive combines a moderated peer group mastermind expert one on one coaching access to proven growth tools and a 24/7 support community created by Inc. Award winning CEO and certified scaling up business coach Bruce Eckfeldt. Thrive will help you grow your business more quickly and with less drama. For details on the program visit Eckfeldt.com/thrive. That's E C K F E L D T.com/thrive.
[00:01:02] Welcome everyone. This is Thinking Outside the Bud. I'm Bruce Eckfeldt. I'm your host. And our guest today is Matthew Norgren. He is CEO, founder of Arcadium Fun. We're going to talk to him a little bit about what's going on in the cannabis industry relative to the Kuvin pandemic crisis that we're in. Obviously, it's having huge impacts on everyone really globally and just about every business. But there's some unique things happening inside cannabis. I think as most people know in the industry, cannabis businesses have been declared essential services in the medical programs, I think in just about all states. I think eight of the adult use states have declared. I think I think the governor of Massachusetts is being sued right now for not making it an essential service. But essentially, cannabis is functioning, at least to some extent. So the industry is moving forward. It's operating, but it is obviously hamstrung with all of the restrictions and things around it. But we want talk a little bit about, you know, how this is playing out and what is likely to happen. I think the most interesting conversation right now is how is this going to reshape the industry? What does the future going to look like? And what do companies do in the space based on who they are and how they operate and where they're located and how big they are? It's going to have different impact. So I'm really excited to talk with Matthew about this in terms of seeing what he is seen as being from the investor side, how he kind of sees this playing out, the insight that he's had, the conversations he's had with that. Matt, welcome to the program.
[00:02:18] Hey, Bruce. Thanks for having me. This is an important time to be having community in any way we can. You know, we've participated with you in the past, and it is a wonderful experience. So thank you for leading before. During, and I know you will after. And we certainly sit in a seat that has a unique perspective on the industry that not many have. There are other wonderful funds out there and we're all very friendly. But from the fund investors seat, it's an interesting perspective that I hope we can share some valuable insights on these topics you just brought up.
[00:02:49] Yeah. No. Well, and I appreciate you taking the time today. Let's talk a little bit about the kind of maybe back up from sort of the coronavirus, you know, coming full force. What was the situation, the kenosis street kind of coming into this? The last couple of months, I know the end of 2019, beginning in 2020. So a lot of kind of volatility with pricing. There was a lot of kind of activity in how these markets were being rolled out, you know, between Canada and the U.S. And there was a lot of drama, I guess, within the cannabis community in terms of the business side of it. And, you know, some businesses not meeting expectations, driving Nelson. President, there's a lot going on from your point of view or from your seat. Characterize a little bit about what was happening with the market coming into Corona viruses. We'll talk about how the virus hit and how that kind of changed things. Give us a summary of things. End of 2019. Beginning of 2020.
[00:03:35] Well, I think the biggest thing you have to talk about first to answer that Bruces and this is based on PTSA analytics numbers we run of our portfolio companies. But regardless, I think the best place to go for that type of an answer in terms of real data. So we're going to go at those numbers. And if you look at them, they say that we grew 36 percent compound annual growth rate in 2019 from 2018. So when you go from less than 12 billion to over 16 billion in revenue as an industry, the answer is you should be pretty excited that significant growth.
[00:04:08] And so the question you ask is two things that then come to mind when you talk about the framework of, you know what I believe? If you look at various metrics in terms of cash flow generation, in terms of asset creation, in terms of consumer awareness, you can see the online numbers from an eyeball standpoint and different places. We are the fastest growing industry there is in that regard. So when you ask the question about market volatility, the first thing that comes up is why are we talking about market volatility in an emerging industry? I mean, you didn't go back in 1995 and look at dot.com and Internet and say, oh, gosh.
[00:04:42] What's the market volatility?
[00:04:44] They weren't public. They weren't public as they shouldn't be. Very few companies in this space should be public.
[00:04:50] The problem is that the fundamental assets, retail, cultivation, manufacturing, agriculture, these businesses require a significant amount of capital to be able to grow. And they got to a point where they weren't willing to wait around for the proper U.S. value chain investor process. They wanted to jump in and jump in because candidate came and said, you can come here and do whatever you want. No door was open. So we shouldn't be talking about market volatility. These companies shouldn't be public. They should be private, and they should be doing what businesses do in an emerging space, which is be prepared to pivot. I don't know if this is volatility as much as it is.
[00:05:29] Properly defined as an emerging industry and as an emerging industry investor, you invest in a diverse hedge way and equity such that, you know, the old 80-20 rule tends to play out 20 percent of your companies or 80 percent of your returns. Every time I build one of these or my team builds one of these in the emerging space, you never think that's going to be the case right now. If you look at Arcadium, we actually don't have a company that's had a down, round or flat. OK. That doesn't mean there's things they have to solve, but because they're private. Yeah.
[00:05:55] You get the opportunity to do what you should be working towards, which is pivoting when something happens in an emerging space. So long answer is I see only things to be excited about. 36 percent growth is phenomenal. That's what I saw coming in. I see an increased consumer awareness and consumption.
[00:06:14] I see things happening in other places in the world to continue the macro level excitement in terms of China and India and Latin America and Africa and Europe. So I see nothing but things that are really exciting. I think the problem, Bruces, that the wounds that the industry had to lick last year were self induced. And when you have a situation where the financial people behind it allow a company to go in a public market to early raise money like an agriculture business at 50 to 100 times revenue multiples, 36 percent growth is a phenomenal as that is. And we'll continue to experience that, if not more is you'd have to have thousand percent growth every year to even get close to where they were raising this before. So you see an asset value reconnection in the public markets, not necessarily anything to not be excited about. We're extremely excited, having played it as a growth equity investor in a fundamentally sound investment to really just more of an anomaly of how the market's played out.
[00:07:11] And because of the regulatory issues in the U.S. and kind of the push the Canadian markets and sort of premature accessing that capital set ended up, you know, exposing liquid. Naturally, there's expected volatility. But which would you put it into? A public market scenario causes a lot of drama. And obviously, the valuations being what they were bid at all that much more difficult. So coming in to 2020, I guess, as you look at how the industry has both affected by and responded to the corona virus situation, you know, on one hand, you know, obviously it hugely impacted. On the other hand, you know, deemed essential services. Right. I mean, the cannabis has been declared something that we need to keep going at all costs, you know, and in some way. And so that's got to be positive. That's got to be good for the industry or it has to be a good feeling. I mean, given that 10 years ago we were illegal. Right. So the fact that now we've gone from you know, we're in a legal business to an essential business, that's a huge turnaround.
[00:08:06] It is. It's a huge turnaround. And I don't think we can express just how important that is today. I think we will have to see what the great people in this industry do in terms of using that as a tool in their tool belt when they go to have these conversations at the state and federal level. And all I can tell you is that in every conversation that happens throughout this industry, whether it's lobbying for the economic side of things or for the human rights side of things or for, you know, people in prison or ESG, I mean, you name it, whatever, the great people in this industry have to go stand in front of decision makers and make a point. Being tagged essential during a crisis is an absolute game changer that I think it's hard for us to really speculate on just how big that is going to be, especially when you have, you know, situations at the state federal level where you need job creation. We know this creates a lot of jobs.
[00:09:01] You need tax revenue, a lot of tax revenue lost. And quite frankly, you know, we've had the longest bull market in history. So in a bear recession pandemic, you know, all the things that are going on, you'll see the need for major asset allocators to find other ways to generate yield in this environment. You know, you tend to see them lean into the big companies that, you know, maybe you buy Microsoft, Apple, I don't know.
[00:09:24] I'm not a public market guy, but you buy the big ones. The rest of them you're kind of unsure about. So unfortunately, that's 80 percent of your portfolio. So you look at your alternative class and your 10 to 20 percent there, you know, you're really trying to lean into some things that you think you can sprinkle some magic dust on and and make it generate some returns that you may lose in your your majority of your traditional exposure. And so you might see this actually be more interesting sooner than we would have thought otherwise. But who knows what to see all this play out. So thank you for bringing up the business. Essential tag. We wrote an article called Reassessing the Essential, which you could find on our Web site. It was published a few places that really talks about this very specific topic at length. I would encourage you guys take a read that put a lot of heart soul into that one and we feel pretty, pretty passionate about it. But that's a that's a big point, Bruce. Thank you for bringing it up. And let's leave it there, because there's a lot of variables that will play out. We think they're good in terms of how we look at this industry going into pandemic. I want to bring up an example. If you think about what comes to mind in terms of an industry that is always.
[00:10:29] Considered to be recession proof, like maybe alcohol and also pharmaceuticals, alcohol, pharmaceuticals, alcohol.
[00:10:35] Now, if you look at those compared to cannabis. So going into the pandemic, you see 36 percent growth. You see a year of properly value efforts in terms of public companies and their asset values already in place. So going in, you had a year for these companies to get to where they should have been in the first place. You have a Vapes situation. You have a number of things where these entrepreneurs are battle tested. I mean, they really are. They're phenomenal, absolutely phenomenal. Feel so blessed to work with so many of them.
[00:11:04] And so going into pandemic, to me, it's a sensitive topic and a very, very difficult thing for most the world. And we respect that. But on the business side of things, I don't know that there's an industry that has as much to be excited about as ours. And the question you brought up hits home as to why so. Thirty six percent growth growing and properly valued. Lots of season battle tested entrepreneurs going into a pandemic where this isn't a recession and alcohol. Think how much revenue alcohol on a percentage basis generates from commercial public social type situations. I I've looked at the numbers. I've seen a few different.
[00:11:40] Someone would know better, but I promise you, it's between 60 and 90 percent of alcohol's annual revenue is done in places that are not yet delivered to someone's home or through a liquor store.
[00:11:52] And so alcohol, although recession proof may not be pandemic proof because you're going to see an uptick in liquor store sales and delivery sales. But when you lose 85 to 90 percent of all of your revenue, that's disaster. Cannabis, on the other hand, is not in a situation where you can buy and consume in a public social manner other than a few places in this country and a few other places. But if you look at that 16 plus billion revenue number, almost zero of that is is a place that when this pandemic hit that we lost as a revenue line item, as an industry. Now, as the weeks and months have gone by, as you mentioned, to start to call, you have a situation where many places that are medical are alive, some recreational, having some debates. But the reality is we've only lost 10 to 15 percent, maybe less of the places that generate revenue for us. I think it's more like seven today. So it's very little as compared to other recession prepend businesses in a pandemic. So I really like the positioning of our industry going into it. Of course, the first two or three weeks for all time sales highs. So you've got to feel pretty good about that.
[00:12:56] And so from an investor point of view, I mean, what's your kind of stance at this point in terms of looking at the industry, seeing opportunities, timing of these things? I mean, what's we're all kind of still guessing. I think in terms of how the restrictions are going to play out, I mean, I don't think anyone is expecting that we're all just gonna magically go back to work in May or June and there's going to be some kind of easing into this, you know, rolling restrictions. You know, this is going to kind of play out over time. But I guess where do you see the opportunities? Where are you looking for opportunities?
[00:13:26] What is the strategy? I think at this point from the investment side?
[00:13:29] Well, it's the same as it's always been, if not to be more aggressive. This is the opportunity to get into something now. If you invested in the dot coms in 95, 96, 97, and then all sudden two thousand hits, ninety nine heads of one.
[00:13:45] And does that mean Google's not a good investment?
[00:13:48] I mean, you know, of course it is.
[00:13:51] It doesn't change things if you're public or you've gotten too excited and got ahead of yourself as a private company, then you could be in for a very difficult situation. But if you think the Internet's going to be big in ninety seven, two thousand doesn't change your mind. It just cleans things up so that the institutional class can get in and say, OK, thank you. You've made the case. These are the dot coms that are going to win. We know who some of the winners are, for example. So I think if you had looked back to 2000 and you targeted Google as a winner or some of these other Internet companies, you would have a hard time believing you shouldn't lean in as hard as possible. Know right now, as Warren Buffett says, stock markets is the only place that goes on sale. People run away. So, you know, I don't know that you can't be more encouraged. So if you looked at this industry in terms of like Arcady and did, for example, you know, we did deals early on, but we launched a fund, 17 said this industry's got five to 10 years of variables to get figured out before it's institutionalized.
[00:14:49] You don't really care too much. I mean, you expect them. You don't know what they're going to be, what the variables are. Every years they're going to be good ones, bad ones.
[00:14:57] But it's all about going from A to Z. Not about what happens in between. If you're private, you expect that you strategize it to be hedged and well diversified so that you have the right companies and you have managers that are really focused on building those as you move through. Any one company is too risky in an emerging environment. There's just too many things that have to happen. So, you know, same reason you invest with Andreessen Horowitz, KKR Sequoia in the 90s, you know, versus trying to do it yourself. It's just tough. That's why the US folks put these rules in place and. The 70s, from a regulatory standpoint, to allow growth equity, venture capital to have certain things around it. From a, you know, capital gains standpoint, from a, you know, exemption standpoint to run these businesses because it's very risky to invest in an emerging space. But if you build a proper strategy around it, what they knew back then, which has created Microsoft, Apple, Google, Facebook, Amazon, Twitter, you name it. Ever since that happened, this country has been able to thrive in innovation because of what's been done at the growth, equity and venture level. And that's where cannabis is. It's not institutional. If you look at every public company out there, you're less than three percent institutional cap table support, real institutional, not a company that's got some shares of something, but like professional institutional grade investors. Until that changes, you should be focused on the private side or on the retail side. This is a general statement approach. There are companies like Cura Leaf who have a great you know, truly there are unbelievable companies that definitely should be there. But in general, you know, you shouldn't be there.
[00:16:30] You just shouldn't be there. You should be private. And that's why we're very excited. The variables change, Bruce. They change. It's OK when you're an equity investor like us. We're there for our companies.
[00:16:40] No matter what happens, no matter what happens till death do us click better or worse through sickness and health, through pandemics and passions.
[00:16:49] That's what we're here for. And that's what type of investor should have been there since the beginning. And now, thankfully, you have a situation where all these great, you know, funds out there that we are so privileged to work with and humbled by on a daily basis, we get to go in and provide the equity in the growth and the structures that the good companies really need. And a lot of the bankers and brokers and public market traders are gone. So companies now have to be realistic with how they're going to structure their deal. That's to the advantage of our entire industry not to have unrealistic comps when you're structuring deals. And so with 36 percent growth being deemed essential coming into the industry and not losing lines of revenue to the extent other pandemic proof industries are. I can't tell you how encouraged we are. We're fired up for the people that have done this right. And now is their chance to prove it.
[00:17:39] Well, then so let's talk about what does it mean to have done this right at this point? Like what? How does I guess how does the game change, given the sort of shift in both the kind of the economy as well as kind of consumer and general public sentiment? And what what is a successful canibus company need to focus on now? And how does that change from maybe six months ago? And what do they need to do to kind of weather the next, say, six months of just kind of getting through this ongoing kind of KOVA drama until we get to some sense of what, you know, the neuroma is going to be? It's certainly not going to be like the old normal. But, you know, we see a little bit more stability and what the future is going to hold. Voodoo cannabis companies really need to do to be successful.
[00:18:18] Well, they need to do what they should have done since the beginning and run a lean operation in an emerging space where you watch every dollar that goes in and out and you track it, relatively speaking, to the industry's near-term growth potential. So if you're growing again, if you're growing at 36 percent macro level as an industry, you should be able to run a very great business no matter what part of the supply chain you are. But what you have to do is not value your business in such a way that you predicted can grow three thousand sixty percent. It's just not possible. So you just have to be realistic in terms of what the growth is. So I think the entrepreneurs and business leaders in the space for the last year or year and a half have already started to make that a priority. And so going into pandemic, I think we were more prepared than most industries from that regard. If you look at to right, for example, you know, we were focused on ancillary US type companies. But just if you look at the market, go look at to raise revenue two years ago and look at their market cap and then look at to raise revenue today in their market cap, which you're going to see is a drastic increase in revenue, a drastic increase in real asset value creation, yet a significant reduction in market cap.
[00:19:33] And what that tells you is, OK, well, why is this not a good business is growing in every area that I can see. Maybe they have to reduce staff, maybe they have to change some things. But in general, they've increased a lot of very important things, revenue and assets. So you would think the business would grow. That shows you how mispriced these things where it has nothing to do with the business success. So I think they are prepared to run leading right now. They've all been trying to. So we've went to all of our companies. I know all the other funds have done this well. We saw a lot of boards together and we've asked all of our companies to really look in to the business performer and tell us very clearly what is the leanest scenario with which you can operate this business for the next three, six, nine and 12 months because we want to be prepared for that. Now, that being said, our businesses are still performing supply chains and tag people are consuming goods. So I think they're prepared. We're asking them to be even more prepared. There are some. You know most.
[00:20:28] Companies were looking to shore up their balance sheets, cap table structures over the last year and a half. So you really didn't see many that didn't try. Anyways, those that didn't get it done in time.
[00:20:40] You know, we in our portfolio, there's not very many. I think only a couple out of 30 something. So you first lean in your companies. You make sure that they're prepared and the ones that aren't properly prepared, you get them what they need to have the runway. But they have to clearly indicate to us all that they know what it means to run lean. Now, what could happen? There's a lot of good things that can happen because you have to be prepared for worst case scenario. Some of the potential dresses.
[00:21:05] So if you look at what's happening, consumer behavior patterns are being developed right now, arguably more than they ever would have at this rate for cannabis. So, you know, somewhere between four and seven percent of the world's population is an active flower user in some capacity on the adult side. And we never expected that to really change. People have had access to flower for tens and thousands of years. It's not going to encourage somebody, at least till the prices better to go change their behi behavior patterns. They'll buy it from wherever they buy it. They'll use it. But it's the other ninety three to ninety seven percent of the people that we have been trying to build product for and educate on that particular delivery method. And an experience that the plant can deliver. So there's a vast majority of the world that has been hearing about it, has always been familiar with the plant, understands it, but never really had the time to understand how these products work. So because we're still in business, what we're seeing on the data side is you have demographics of people that are purchasing products.
[00:22:02] The buckets are up 25 percent in many states. So the people are buying a larger bucket than they normally do. And they're buying products in it that are very different than what you would normally see in behavior patterns. You might see an individual buy a sleeping product, a product for their pets, something to keep them excited during the day, maybe inedible. So you're seeing this wide diversification of products purchased by different demographics, which to me believes leads me to believe that consumer behaviors, patterns are being developed for an industry that they haven't been developed. So you don't have to change everyone's behavior. You're just educating them and allowing them to experience and explore experiences through products that they didn't even know existed. So if you get it right during this time and you make someone's life better and you deliver a brand name on top of that experience that they can identify with, this is the time you could actually, you know, really lock customers in consumers and for potentially the rest of their life. So it's really, really important right now, I think, in cannabis to be focused on that.
[00:23:05] Yeah. And let's talk about the regulatory side a little bit, because, I mean, you know, we talked about, you know, cannabis was deemed essential service rent. So, you know, big positive. On the other hand, you know, cannabis companies cannot access these federal programs, the stimulus programs that TPP and the SBA loans, you know. So there's kind of a hit on that side, on the state side that, you know, we've seen some really quick regulation and regulatory regulators have moved quickly to kind of adjust their programs to adapt to the situation. I mean, how how do you see so the regulatory side of this playing out like on some. I mean, in some ways I see some really positive change. On the other hand, I think, you know what? I think we're going to see the two. Any pushback? I think banking regulation, you know, is really doesn't look great for 2020. I mean, I guess, you know, net net. How do you see some of these these factors playing out? And what do you think the net net is on the regulatory side? Do you think we're gonna be in a better regulatory situation or we going to extend some of the problems that we've been having?
[00:24:01] I think it's going to delay us knowing the answer to that for a little bit of time. Just impeachment and pandemic and an election. People are busy. That's fine. So I think we don't understand what those answers are for a lot longer than we had hoped. But I do believe that if you look at all of the variables that are at play to give an answer that question, they all line up to the fact that this should get more attention when the conversation actually happens than it ever did before. I mean, we can't believe there's any reason why it wouldn't. And so and so I think we have to wait a little bit for that. And right now, we just need to do our best job to clean out bad actors in our space. And that will naturally happen. And to be honest with you, a lot of the news, you're going to see if there has been any negative news that you had been paying attention to as a listener to this broadcast, be paying attention to the ones that are going to come up and just probably understand that those are companies that had problems anyways. And this accelerates that or gives them an excuse, gives them an excuse, which, hey, you know what? I hate to say that because that's but it is a reality, you know, and it's a reality that people may use this unfortunate situation for many as an excuse as to why things didn't work out.
[00:25:15] But the other side of the coin is there are great founders, great investors, great people that did things the right way, looked at their business, properly valued their business, said, hey, I'm a data software, SAS based business. What is my type of company trade at? And I'm going to build my business based on the industry's real growth numbers and the types of multiples and metrics with which my business trades at. In any market in the world, those people will be able to get through this. They'll run lean. They'll be super happy. And on the other end, which isn't that far away, we get some of these questions answered. And I think most of us believe that the light at the end of the tunnel is more visible than ever. It certainly is at the end of the tunnel right now. But it's not like we don't think that it's brighter. It's almost like a leak in a dam that is just bringing is good is getting a little bigger, a little bigger. And it just feels like it's about to blow open. It is needed now by states and governments at the federal and state level more than more than before. So I think it's good you're going to see some of that play out, pay attention to that and really read through the lines as to is this company potentially one that may not have done the right things anyways?
[00:26:22] So I think another another point I'd like to bring up their various is that coming out of the pandemic, you also have to be very encouraged from a consumer standpoint, because compare this to, I don't know, some other names, some other great businesses or industries that are benefiting from this.
[00:26:36] Well, pharmaceuticals are doing well and some others are consumer facing consumer. So it's likely that not during some words I could see is more. It's the meeting video. Yes.
[00:26:51] Ok. Everybody's on their way. So what happens when the new reality, whatever that means, sets in? Well, I can promise you, if people want to be in a real life community situation, people are going to take real meetings again. Are they going to be more aware that Zoom is a good option? Yes, they are. And to some extent, you know, as the years go forward, there will be a boost and awareness and use for online meetings. But people have the option which the majority of them will take to move back into real meetings. So in cannabis, that's not an option. Feel like Eastport. If you're sitting home playing Eastport, you know, the minute Tom Brady straps on the cleats and the gear with that new Tampa Bay Jersey, you're going to want to see that happen. Right. So in cannabis, you don't have that option. You can't pick up cannabis as a product. And during this pandemic and then go back to some other way of consuming cannabis, it doesn't exist. When the pandemic's over, you either buy this through delivery or you go to the retail like a pharmacy and it doesn't change for you. So we don't lose any consumers either. Like many of the businesses that are doing well in a pandemic, like cannabis is one of the few that you know.
[00:28:02] Yeah, it's a temporary bump or a more minor bump long term because of the option to go back and have attrition, whereas there isn't that in our space.
[00:28:10] So, you know, not very many industries in the world can say they grew at this pace going in. They're thriving and doing just as well as any business during. And you can't leave that consumer purchasing behavior after, you know. I don't know if there's any. So it's it's a lot to be excited about.
[00:28:25] You know, I'm curious for the companies that, you know, we're not healthy coming into those who hadn't done the work they needed to do to, you know, position themselves in a strong way to be able to weather this. What happens with them? I mean, in a kind of a regular industry, there's kind of a M&A process. You know, they get bought up by other companies. Their assets get utilized in different ways. You know, in cannabis, it's a little funny just because you have all the regulatory issues around it. Some of these assets are difficult to move around. They're tied into licenses. Licenses have, you know, various regulatory kind of constraints. I mean, do you see this kind of functioning fairly efficiently from an M&A point of view, or do you think there's going to be problems in terms of being able to deal with these assets and these companies that don't perform so well in our navels?
[00:29:07] Well, it definitely depends on if you are a plant touching asset or not. Because if you are not. Different conversation will transpire. So the first thing I'd like to say on the ancillary companies is that and this goes for any company. If you had taken capital from the venture capital growth equity community of funds with a brand name that are very well respected in the community that they have to be thinking about in terms of what their brand means to the community and how you deal with your companies.
[00:29:39] If you take capital from groups like ours, we are with you till death do us regardless. And so we are we don't have the choice to leave the company behind. We don't have the choice not to pay attention. And so when times get tough, we're not in there.
[00:29:54] You know, if we were just a facilitator of a transaction, a broker or a banker, we would be long gone. I mean, once the transaction is done, your long gone, you won't you can't even talk to those people right now. Maybe. Maybe some answer. Good bankers. Well, but most many won't. And so if you had taking growth equity, we've been answering your calls every day. And we can't go into work as we're tied to the success of the business, just like the people that are fighting everyday for that to happen. So we are invested in present enough to make sure that if a situation comes up, we're able to be ahead of it. We're able to talk to our friends at other folks. We go out to the community and all the other companies and we're able to try to give the best opportunity to make a deal, whether that be sell some of the IP, whether that's, you know, do an M&A event privately, take on some of the we can really help. And we're not just coming in at the time it's needed. We're there. So you've got to be really cognizant of what type of capital you should be taking in an emerging industry, because it's really a partnership. And that's where this is where you get to prove that. And boy, we're excited for that. But if you didn't, then a different conversation, because now you're trying to figure out if the people that were involved with your business are going to be involved. And if it is, then it's transactional. And so they're less concerned with your feelings, your emotions, your thoughts, your family, and more concerned with what your assets are worth. And they're going to make decisions based on that. Now, good debt and credit providers care about you and they really don't want to see people hurt.
[00:31:22] But their fiduciary responsibility is quite different than it is as a venture capital or equity firm investor. So they have to at some point make the decision to kill a company, take something from a company. They are forced to make very tough decisions and they're going to have to do that. So to answer your question from that perspective, which we didn't do any of these plant touching overvalue deals. So we aren't having to really work on a lot of that, although we're very familiar with it and have partners that do handle that side. So in Canada, at least, you have the rules with which you can do that. In the United States, it's kind of a state thing. Some receivership is happening. Bankruptcy is obviously a question, but I think you can feel comfortable if you've underwritten the deal in such a way that you pick it up at an economic value. That's makes sense. And if you pick up a company or a business that has assets in multiple places and let's say you miss on a few things, you can't get a few. There's some problems if you've underwritten it right. You've already accounted for the fact that a certain percentage of that may not work out for you and you're OK. But the real answer is we don't know how a lot of that's going to work out. And in an emerging space where you don't have those rules, to me, that's why we haven't built a strategy on that, because you're just a lot that goes with a lot of complexity that you have to have in place to feel extremely comfortable making that particular move.
[00:32:43] Yeah, well, I appreciate your optimism and I appreciate your kind of outlook on the industry. I think it's not only much needed. I think it's correct. I think we've got a lot to look forward to. I think the fact is we're gonna have a painful six, twelve months. Overall, the entire world is going to have a painful six, twelve months. I think cannabis, just like everyone, is gonna have a painful six months. But I think there are so many things going for it. So many opportunities. A lot of bright spots for the future that I'm excited to kind of get through it and see what we can do with this industry, with these businesses, because I think there's a lot of great things that can come of this. If people want to find out more about you, about Akkadian was the best way to get that information.
[00:33:17] Best way to be Arcady and fund dot com or Arcadium cap outcome. But a lot of our information's on the Web site.
[00:33:24] Bruce, thank you for the time. Thank you for giving us this audience. Nothing means more than being able to properly share thoughts and perspective from you know, we consider ourselves a group that really cares about this industry. We are our whole lives is in this industry. And, you know, the the biggest thing we can say in parting is that we encourage everybody to work together. Collaboration is the key. Transparency is the key. Doing things the right way is to keep it together. There's just no way that we lose just zero way at this point in time. And so staying together, working together, collaborating, there's enough for everybody.
[00:34:02] Trust me. It's so big. This is so big. There's so much for everybody. You don't have to fight for your own. You can share. You can work with people. You're early enough.
[00:34:12] This is so big. That's the way to do it. And and please feel free to reach out to us if we can be of any help.
[00:34:19] Thank you so much, Nancy. I appreciate it. And we will keep in touch as this plays out. And I really appreciate your time tonight. You too, brother. God bless.
[00:34:26] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidethebud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com/newsletter.