In this week’s Diamond Hands Podcast #11, Shadd and Anthony Varrell connected with Matt Hawkins, founder and managing partner of Entourage Effect Capital, based in Austin, Texas.
To start off the conversation, they briefly reflected on the mood at MJBizCon, with Hawkins providing a few key takeaways from his time at the cannabis conference in Las Vegas last month.
“For us, it was a grind. I was in meetings from 8 to 6 all day every day, ranging from new opportunities to catching up with our existing portfolio,” he said. “You’re touching and feeling your investments, and that’s obviously key to any industry.”
Hawkins also commented on some of the trends in the industry and said something his firm is focused on is scale-building: “The whole concept is to build as many larger size companies and verticals as we can.”
According to Hawkins, there are good medical plays in states in the southeast, and when combined with some of the single-state operators in limited license states in other parts of the U.S., there is a huge opportunity for the scalability Entourage Effect is working towards.
“There’s a real chance to cobble together single state operators into larger plays, which is exactly what our premise is. “Scaling companies at the operator level is certainly part of our strategy.”
Around 4:30, the conversation also covered the nuance between public and institutional investments, and how this affects companies in the cannabis space.
When it comes to the passage of the SAFE Banking Act, (5:33) Hawkins suggested that the idea it would pass by the end of 2021 is probably wishful thinking. He believes it will probably pass in the first quarter of 2022, something that’s likely to happen now that banks are also eager to see it passed. Banks, he said, “can move the needle on decision makers” more easily than cannabis companies.
Around 7:30, Hawkins didn’t name names, but he suggested said there are good buys right now for investors looking to get into the cannabis space.
Check out the full conversation in this week’s Diamond Hands podcast in the video above.
To view Diamond Hands Podcast Episode #10, click here.