Cannabis Investor Spotlight 0043: Phyto Partners - Investor

"Cannabis Investor Spotlight" is shinning on Phyto Partners managing partner Larry Schnurmacher and their portfolio of non-plant-touching companies that provide the essential products and services to the industry's plant-touching companies.

Produced By MJBulls Media

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Dan Humiston:
Today Show and the following message are brought to you by a former guest. Alt 36 is a cannabis payment solution that's powered by Dash cryptocurrency. To learn how you can take part in their expansion go to all 36 dot com or listen to MJ bulls episode twelve.

LARRY SCHNURMACHER:
All of our portfolio companies seem to be able to have been able to leverage also other portfolio companies that we've invested in so that's worked out really well we kind of have an ecosystem of all sorts of different parts to this problem solving for the operators in the industry.

Dan Humiston:
From Buminit media it's the MJBulls Podcast a show about Raising Cannabis Capital. Hemp Dan Humiston and on today's show the cannabis investor spotlight is shining on Phyto partners in their portfolio of companies that provide products and services to cannabis companies.

Dan Humiston:
Today in the cannabis investor Spotlight Series we're joined by Larry Schumacher the managing partner of Phyto partners. Larry thanks for joining us today Pope's podcast.

Dan Humiston:
Thanks for having me.

LARRY SCHNURMACHER:
So I've heard a lot of great things about you Larry and it's nice to finally meet you. I really want to jump right in where we are with Fido fighters got kind of an interesting approach to how you invest none of your portfolio right now at our plant touching companies is that correct.

Dan Humiston:
That's correct. So our strategy from the beginning has been to look for businesses that solve problems for the licensed growers and the licensed sellers. And there's a bunch of them and these guys can't do business without these problems being solved for them. We've focused on companies that help licensed operators do business with all this. You've seen tons of money go into the cultivation part of the industry. All of these licensed producers in Canada some in the United States. We've also seen a lot of money going to the dispensary side of the industry. So companies that are opening up dispensaries in multiple states. Those businesses don't function like other industries. It's not like opening up a liquor store and then you can just oh get a little look at you are you start advertising and marketing and selling your product and developing the client base. It doesn't work like that. Cannabis not even close. The businesses that we've focused on again are companies that help with the demand side of the industry teaching doctors and patients how to incorporate cannabis into their medical practice or how to incorporate cannabis into their treatment programs for whatever illnesses they're dealing with or helping their patients deal was jumping around here.

Dan Humiston:
But another thing that I find unique about Phyto is that you're not adverse. In fact sometimes you even encourage working with other investors sort of co-investment projects. What's the advantage to doing it that way.

LARRY SCHNURMACHER:
We have looked for companies that attract interest from other institutional investors in the cannabis space not just kind of wealthy individual investors that are attracted to the space. We want companies that have been successful in finding other institutional investors like Fido to participate in their raises. We know they'll be around for future raises they'll be supportive strategically to helping them grow their businesses and be successful in executing whatever plan there for their business. Yeah we don't want to be investors with a whole bunch of family and friends. We want institutional players who will be there for future funding rounds for growth issues delays things like that. So we've tried to put together a portfolio of companies that can leverage or one or another that can collaborate that can in some way help one another to succeed not necessarily the same businesses and sometimes competitors. All of our portfolio companies seem to be able to have been able to leverage also other portfolio companies that we've invested in. So that's worked out really well we kind of have an ecosystem of all sorts of different parts to the problem solving for the operators in the industry.

Dan Humiston:
When people are looking for raising capital I think that's one of the things that they sometimes overlook. But it could end up being the most important aspect of it is the relationship they know you and your partner Brent are everywhere. And you know everyone. So your network you utilize that and help your any of your investing portfolio just average the heck out of that. That's a really big benefit. I don't think people sometimes appreciate how big of a benefit that is.

LARRY SCHNURMACHER:
It's still a benefit to us to our partners and our portfolio companies. It's worked out perfectly. Kind of by design every one of my portfolio company CEOs would kind of sing our praises. That's how we help them in some way. Most of the time we haven't gotten in that way. So that has worked out well.

Dan Humiston:
Yes those introductions along those warm introductions make such a big difference.

Dan Humiston:
Just a quick shot to one of our former guest Blaze cannabis technology company with software for dispensaries distributors. And coming soon. Manufacturers and cultivators Listen at MJBulls episode 33 or go to blaze.me y to learn how you can be part of their expansion.

Dan Humiston:
Let's switch gears and let's talk about investors. Part of your business is that you have to raise capital in order to deploy capital and you know there's a lot of our listeners are accredited investors who are sort of making that decision is how do they get involved in the cannabis industry. What are some of the advantages to working with Fido.

LARRY SCHNURMACHER:
So the advantages of working with a fund like Phyto partners is that you're working with professional investment advisors. My partner and I have been in the industry in investment banking and regular way wealth management for a combined 50 years or so. We.

LARRY SCHNURMACHER:
Give access to the industry to individuals who normally wouldn't be able to invest in anything other than the pot stocks that are trading all over the place. Valuations sometimes have very little to do with the businesses at hand. Sometimes there is no business. We are finding and we're able to source privately held companies that are real businesses with strong management teams and exciting entrepreneurs who are finding ways to insert themselves in this industry. There's lots of different parts to growing and selling marijuana. Cannabis is like two obvious parts of the industry that are kind of the shiny objects that everybody is looking for you know license growers or licenses to grow and sell marijuana. What we have tried to do is find businesses that help those those two ends of the spectrum function in this industry. So we get access to accredited investors who want to have a diversified portfolio. They don't want to be in one investment reliant on one let's say geography state country or part of the industry. Investing in a fund like Fido you're investing in human resource management technology point of sale seed to cell tracking compliance businesses big data companies.

LARRY SCHNURMACHER:
We've invested in a testing lab. We've invested in a company that provides grow technology to the cultivators.

LARRY SCHNURMACHER:
We've invested in a staffing company that helps these cannabis businesses staff up find executives and actually has something called gigs which is an on demand employee service for operators. It appears to be a company called thanks which I met through another portfolio company is I believe your daughter's company. She's done 30 under 30 and doing fantastic.

Dan Humiston:
One of our profile investments in the first song she's very very proud of what she's doing. So if an investor is listening right now wants wants to get in touch with you to talk to this further and get more into detail how would they get in touch with you.

LARRY SCHNURMACHER:
They can either email me at Larry or phyto partners dot com Larry at or you can call me directly 5 6 1 5 4 2 6 0 9 0. We are a second fund is still open to new investors.

LARRY SCHNURMACHER:
We've started to deploy capital already very exciting businesses and I'll have all of Larry's information in case people didn't catch that.

Dan Humiston:
I'll have all of Larry's information and Phyto partners information on the MJBulls website at dot where he's been great finally meeting you. Hope we can do this again in the near future.

LARRY SCHNURMACHER:
Sure I'll give you an update on the second line at the beginning of the year we'll have probably ten or twelve portfolio companies up from six at this point.

Dan Humiston:
Oh my gosh. Good for you. This is really exciting stuff. Thanks again. Good luck. Take them. Just a quick shout out to one of our former guest. I don't AutoCure. Automated drying and curing units that are being installed in large cannabis cultivation facilities throughout North America. Listen to MJBulls Episode 7 record auto cure . us to find out how you can invest in their expansion.

Dan Humiston:
Thanks for listening to the MJBulls Podcast. To learn more about today's guest or to become a guest. Visit our Web site at MJBulls.com.

Today's show is produced by Buminit media Original music composed by Jamie Humiston. I'm Dan Humiston and you've been listening to the MJBulls Podcast.

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