Ca$hing Out 04: Bull Fighting with Rich Batenburg

"Cashing Out" a show that follows the weekly journey of one cannabis entrepreneurs sale of his cannabis company.   In this week's episode a "Bull" enters the Arena; Rich Batenburg managing director of Cliintel Capital Management Group questions Dan Humiston about his business.   Larry Mishkin our attorney from the Mishkin Law Firm also calls in to talk about NDA's.  Our co-host Dena Jalbert from Align Advisory Management Services leads the discussion.

Produced By MJBulls Media

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Rich Batenburg:
This would be I think a good pitch for a family office who was sitting that in that situation to the older generation could I guess sort of extend an olive branch to say hey we're involved in the industry but it's at a level where the return that is comfortable and everybody safe space so to speak the younger generation can say that they are exposed to cannabis and the older generation can say. But where we have like a blue chip type of exposure that is in no way skirting the federal illegality.

Dan Humiston:
Hello everyone. Welcome back

Dan Humiston:
To cashing out brought to you each week by Hoban law..

Dan Humiston:
With me today is my faithful co-host Dena Jalbert Align Business Advisory Services. Hi Dena.. Hey Dan how are you. I'm doing great. I'm doing great. We have a very busy show today.

Rich Batenburg:
We do. I know. I'm excited for the folks they're going to be joining us. Yeah.

Dan Humiston:
We have two guests are attorney Larry Michigan and our first bull in the bullfighting ring is rich Batten Berg. He's a managing director at client tell management Capital Management Group. We'll be calling rich in a few minute but before we do let's talk about what's been going on since we made the announcement.

Dena Jalbert:
Yes absolutely. Well we've been doing quite a bit. You know first thing that we always do is you and I sat down we talk strategy right. We talked about who we think might have an interest and why we think they'd be good partners and from there we started now really tactically identifying who those individuals and entities might be. So no we were doing quite a bit of research and looking at other trade show organizations that might have an interest in coming into the space you know other media outlets that might have an interest in branding it and having their logo and being a donor and a sponsor for lack of a better word in the space so you know we've really just been exploring a lot of those strategic avenues and identifying the decision makers and trying to connect to those folks and get the podcast and get our materials in front of them and start having some conversations.

Dan Humiston:
I think the big part of this process is the preparation in a lot of people underestimate how much preparation it takes place but you really and you're great about that Dena. just really put the strategy together and how do you want.

Dan Humiston:
Who do we want to talk to. How do we want to talk to them what do we want to share. Yeah.

Dena Jalbert:
You know it's really important in these types of deals we're really in on a deal not just this one. This one is does have its own unique characteristics to it in that you want to be very thoughtful about who you're talking to and frankly who you're putting an opportunity in front of right because it's very strategic for them too especially in an industry like the cannabis industry where everything's emerging and folks are there's competition being the first within the industry. And so putting an opportunity in front of someone who you want to make sure it's the right person people that you think will have the same vision you know as especially in this case because there's partners and other folks as a part of the business you know making sure that they share that same kind of strategic vision and treating it like a piece of real estate. I think sometimes is where it gets commodities shallow just let anyone and everyone know that you're wanting to sell well. And we're kind of our previous podcast but when we go one to one and we have those conversations we do it in a very thoughtful and strategic way to preserve what's proprietary about the process but then also to develop the right relationships and start creating that goodwill on that value which is what drives every transaction a successful club.

Dan Humiston:
You want to get started with our first guest rich Batenberg. Let me see if I can get him on the phone. Fantastic. Rich. Well Rich say hello to Dena.. Jalbert She's my co-host on the show. Hello there. Hi. You're in the arena. You're the first bull in the arena. You're going to set the tone for future bulls.

Dan Humiston:
You've had a chance to look at the pitch deck and listen to our show last week where we introduced the company and you have a little bit of background.

Rich Batenburg:
Sure. So to recap from listening to your interview of Dan Dena. you asked the one question that's my favorite one too at the end where you ask them why why why. So I got that.

Rich Batenburg:
But Dan maybe you want to know recapping that for about the last since I started it was really been my full time job running the show and putting the pieces together and assisting everyone else this involved in our company. And little by little I sort of worked myself out of a job. My partners have taken over most of the things that I took care of before this the company has grown we've added key employees. And again I've worked myself out of a job so I have some ideas and the cannabis industry. I mean one of them obviously is this podcast. It's time for me to move in a different direction. They have a pretty defined plan. They've done this strategy many many times. They know the formula for building up a trade show and it's a longer term play. And I'm at this point in this industry there are so many opportunities and I'm a hands on. Start a business kind of entrepreneurial type of person and I want to get back into the game and start you know start a few other businesses so.

Rich Batenburg:
Right well it's good that you have that kind of self-awareness most for nerds or business builders typically stay too long because it's their baby and they don't want to let anybody else raise it. And of course nobody cares more about your business than you do. So that's a fairly outstanding level of self-awareness. And it looks like you've got a really great partner from the same. Of what they've done just outside of this industry and that kind of thing so any kind of buyer I think would be very impressed by the infrastructure that seemingly your. The other 50 percent brings to the table.

Dan Humiston:
You know I think our show has held up pretty good. Every year we've increased the floor size. The attendance has increased every year in the quality of our speakers the quality of the booth that are on the floor. Every one of these measuring matrix have increased and so that you know I think that bodes well it's a true indication of the industry.

Rich Batenburg:
Right. So this is unusual from a standpoint of an offering. In my experience as you are neither a majority nor a minority. Given that the company split directly down the middle. So this is an invitation to sit at the table on equal footing theoretically based on the equity that's being put up for sale here. I don't want to retain any of this you want to get as much capital as you can out of it so you can go to all the other wonderful things that you have going with this. I'd guess in particular and some other things.

Dena Jalbert:
Yeah exactly. Yeah exactly. You know Dan and I talk a lot about that point in any business relationship. It's really important that the two parties have the same kind of vision and motivations and show and dance perspective to have it resolved to step away for the opportunity to someone who does he sees and wants to be in that place and sees the opportunity for that. It's a win win all around.

Dan Humiston:
I think it would be more of a conservative investment for somebody that wants to be in cannabis but doesn't really want to be an cannabis and somebody that wants to have an investment but doesn't really want to have to work.

Rich Batenburg:
You know my time horizon I put on cannabis is seven to 10 years until we get massive consolidation federal legalization in which case I don't know what happens to shows then when everything's owned by Monsanto Philip Morris mark and be interesting.

Dan Humiston:
One of the things that I think where this show has a lot of potential is with mainstream especially in hemp is mainstream starts to move into cannabis Our shows are pretty well positioned to accommodate mainstream businesses when they start to feel comfortable enough to be at a cannabis show because we're in New York and we're in L.A. and it's not the party scene it's Las Vegas. I think we're really positioned great to accommodate that group.

Rich Batenburg:
Yeah. So it's a perfect investment for as you said somebody is very conservative. This is more of a blue chip type of opportunity. It's basically an annuity whereby they can count on a return and and count on the partner to really run everything and grow the business and be incented I would say that an investor of that type would be perfectly aligned with the operating company.

Dan Humiston:
And as I said in my previous show is that we're going to make sure we have the right person. Everyone has their greed out who that entity is that comes in to take my place. It's not an automatic.

Rich Batenburg:
My interest in it would be to place one of my really conservative type investors who are sort of afraid of the flame of cannabis but would like some exposure to it in what appears to be a fairly low risk way. There's a lot of excitement from investors being able to say that they're involved with cannabis as some kind of a bad boy fantasy or that you know because you know typically my investors are consumers of the product. I do have a few or not. This is the kind of investment one of those kind of well-heeled creditor type investors may look at seriously. I mean analysis happens to be probably a good time to be pitching this because the market is crashing like crazy markets. The market's given back to 8 or 10 percent that most investors have made who are in that class of kind of conservative.

Dan Humiston:
Well you know that's good to know too because there are some funds that are not planned touching funds that are a little less aggressive. And then there are some people like this like you said some high net worth individuals who are still queasy on about touching of land that this might be exactly what they're looking for.

Rich Batenburg:
I think it's a perfect pitch for a family office. This family is split over family offices. I talked to a lot of family offices just given the stage were out with the baby boomers aging. Typically they want. They're the ones that have passed on the wealth. There's younger people who are functionally running the family office but the older generation has veto rates and typically they are still of that generation that doesn't see the difference between marijuana and heroin. And there's just absolutely no way or we're going to get involved with that. This would be I think a good pitch for a family office who is sitting in that situation to the older generation could I guess sort of extend an olive branch to say hey we're involved in the industry but it's at a level where the return that is comfortable and. A safe space so to speak the younger generation can say that they are exposed to cannabis and the older generation can save. But where we have a light blue chip type of exposure that is in no way skirting the federal illegality nature of our gender.

Dan Humiston:
Good advice. I haven't really thought about that but that's really good advice.

Rich Batenburg:
Yeah family offices are you can tell you there's tons of them. I read a statistic there are like 78 trillion dollars about to change hands in the next 15 years and I can tell you all of them are interested. And it's because of the next generation who is now coming of age as they're in their early thirties early 40s. They're itching to get exposure to this industry but they just can't get it over the goal line even though a lot of foreign family offices particularly Asian money are interested. This is a great great opportunity for that kind of investor.

Dan Humiston:
We've taken up a lot of your time but I think I don't know is it helpful at all.

Dan Humiston:
Oh super help. I do have a couple of investors who might be interested in something like this. A few. Yeah I'm gonna let you go.

Dan Humiston:
We stop another phone call. We have to do with our shirt with a lawyer. Give us some some advice. There probably should have given me before I talked to you. Rich thanks again.

Rich Batenburg:
All right thanks. Good to Richard Dena..

Dan Humiston:
Thank you. Good.

Dan Humiston:
It's serious. Before I call Larry let me do some quick business and thank one of our sponsors. Alt 36 there are payment processing platform that replaces cash with cryptocurrency which they run through the dash black J network. To learn more go to episode twelve and listen to my interview with their CEO Ken Ramirez or go to alt 36 dot com. All right so now let's get Larry on the line. Larry say hello to Dena. Jalbert. She's She's my co-host on the show.

Larry Mishkin:
I get to meet you as well.

Dan Humiston:
But quickly for our listeners Larry Mishkin is from Mishkin Law group and the long time cannabis attorney based in Chicago. It's your of counsel with Hoban law. you handle all of Illinois's cannabis work for Hoban law. is that correct.

Larry Mishkin:
You are correct. I am of counsel for the Hoban law. group. I am an Illinois licensed attorney. I handle a lot of matters pretty much all of the firm's cannabis matters as they relate to anything going on in Illinois. But my practice has also expanded to a national basis. There's a lot of different things. Let's go one that don't necessarily require that you be a attorney in a particular state where the matter is happening through the Hoban law. group. We actually have attorneys in every state that has a program so that I have someone I could just go to and say Would you look this over and make sure that what I've drafted complies with any applicable California a lot of Colorado law.

Dan Humiston:
Gotcha. Well for our listeners Larry and I've worked together for a lot of years. But the funny thing is and we were just talking about this. He and I were in Seattle at the MJ biz trade show and they had that trade show back in 2013 where I got this idea.

Dan Humiston:
And so Larry was there at the first trade show.

Larry Mishkin:
You know it was during a show that was actually the first time I had met Dan and we sat there over there in the house for two days listening to these presentations. And I walked out of there and thinking wow what an amazing industry this is going to be a great industry to work. And Dan walked out of there thinking Wow trade shows that is definitely ask for help. And I stopped and I looked at me really and this was in what. Nov. And by the following June you guys had your first show in Las Vegas at the hard rock.

Dan Humiston:
Yeah yeah. Our listeners can probably appreciate the anxiety that you face there that you had when I mentioned to you that I was going to do this show and do the sale of the business on this show. And I am going to give you credit where credit's due. The best thing about working with you Larry is that you tell me the legal side but you'd never try to influence my business decision which is I mean that's rare for attorneys. The attorneys always want to become a business person but you really are real good about showing me the downside the upside the legal side. And then let me make the decision so thanks.

Larry Mishkin:
Well it's my pleasure and you know really that's the way the job is supposed to be done. Luckily I've been practicing long enough that I finally figured that out which I am very happy to be able to play my part. The overall process playing that first conference together and the subsequent ones was a tremendous experience in terms of introductions that created for all of us in the industry. You know I think you mentioned it on your previous show that you guys really positioned yourself. Well I think that other than MJ business daily conferences you guys became the second most popular show on the circuit. It was a great accomplishment. Very nice to be able to say I was there at the beginning and seeing where you were faking it.

Dan Humiston:
Well let's jump into some I know one of the things that you are a stickler on crossing the t's and dotting the I's and under that heading is non-disclosure agreements and disease.

Larry Mishkin:
Give us the full 1 or 1 on an NDA Why do I need it. What are they. What are they for and why is it would it be so important. This show that we get everybody under an NDA.

Larry Mishkin:
Let's just say this. I like to think of NDA as the safe section version of business transactions. What's happening is you are sitting down with somebody who you may or may not know very well and you're sharing a lot with them. And it's very personal and it's very important. And if it's shared or transmitted to the wrong person or use in the wrong way it can be very very devastating to businesses. And it didn't take long for people to figure out to say if somebody comes in and says they want to buy my business. Well you know in order to properly value the business they need to see my books and me to see my records they need to see my customer list. They need to see my intellectual property and trade secrets. All the stuff that's unique and special to my business. And what happens if after I showed them all of that they say you know what we've decided we don't want to buy your business. Now we know how to do it. We're just going to go out and start our own and compete against you. And that has to be protected against. And the way we do this we use an NDA and just closure agreement which allows you for exchange of the type of information that's typical required for the sale of a company or a major asset.

Dan Humiston:
I mean you mean you're going to be on the show quite a bit. Anything else that you want to caution Dena. or me about going into these interviews are these in particular related to NDA. We're trying to make sure we get Oliver India's in place before we have guest on the show and we'll try to before we send out anything beyond the basics. We'll make sure that we get an NDA in place.

Larry Mishkin:
Yeah I think that that's important that it becomes an important part of your show. For that your little supporters understand that that's just a natural part of the process and that you know it's a legal way to deal with somebody who says I don't deal with NDA it's good for them to hear hey wait a second. Everybody deals with ideas. Would you be ok with that. Yes. You don't want somebody to feel like oh maybe I don't know what I'm talking about. OK fine I will say the NDA. So I think it's great that you incorporated into your show that it can be discussed as needed and whenever those types of issues arise. Well thanks Larry.

Dena Jalbert:
Larry Mishkin from the Mishkin law firm Larry is gonna be a reoccurring guy so you guys will get to know him pretty well.

Larry Mishkin:
Well thank you to both of you. I look forward to speaking with you again in the future.

Dan Humiston:
Sounds good thank you. All right bye bye. Well we have a busy week ahead of us. Yes we do. You have anything else before we sign off.

Dena Jalbert:
No I think we got some great feedback today. I know it's certainly got my hand turning and in regards to some of the outreach we're going to get but hopefully next week we'll have some feedback from some of the folks that we talked to to discuss.

Dan Humiston:
Yeah. We have a couple of people already lined up as guests for next week. This thing is really starting to take shape. So if you have any ideas any thoughts any comments please e-mail us that connect at MJBulls.com Connected. MJBulls that comment I have Larry's. And Rich and Dena. information and MJBulls Web site.

Dan Humiston:
So all right we'll have a good week Dena. everyone else have a good week we'll see you next Sunday.

Dena Jalbert:
All right sounds great. Take care. Thanks.

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