Cannabis Investor Spotlight 0067: Explorer Equity Group

"Cannabis Investor Spotlight" is shinning on Cody Shirk co-founder of Explorer Equity Group as he speaks with Dan Humiston about his unlikely journey from firefighter and world traveler to international cannabis venture capitalist.  His straightforward approach to cannabis investing is rooted in his years of personal investing experience around the globe.

Produced By MJBulls Media

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Dan Humiston:
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Cody Shirk:
Beta a story about the butterfly coming out of the kitchen. The butterfly doesn't get squeezed out of the cocoon that is polluted doesn't get pushed into its wings to fly away so it gets ripped out of the computer and its cap off the ground and can fly away. It needs to have that struggle and needs to have that experience. They are successful and I think that's the most important part of human life and this was very satisfying internally to know that she overcame something and became successful.

Dan Humiston:
From Buminit media it's BMJ MJBulls Podcast a show about Raising Cannabis Capital. I'm Dan Humiston and on today's show this former firefighter.

Dan Humiston:
Fought his way up to build himself into an International Cannabis venture capital.

Dan Humiston:
Today the cannabis investor spotlight is shining on Cody shirk co-founder of Explorer Equity Group which is a private equity venture capital firm. Cody welcome to the MJBulls Podcast.

Cody Shirk:
Thanks. Dan's really excited to be here.

Dan Humiston:
You know I got to start right with this. You started your career as a firefighter. How does somebody transition from being a firefighter to being an international investor here.

Cody Shirk:
It's a man on one hand it's a kind of fun story to tell. But now the hands really frustrating because in general people oh you're a firefighter you know anything you grow up in the world of finance so it's kind of mixed emotions for me. But the basic story is my dad is a firefighter out of college I became a firefighter and most people follow their parents footsteps. And when I became a firefighter I kind of started to connect the dots of how do you become more successful. How do you take it the next step. And I learned very quickly that if I worked as much as possible which means as much time as possible I could become an accredited investor and then I could do these private deals and all types of different industries. And that's what I did and I lost a lot of money in the very beginning and made a lot of mistakes but I got an MBA in hard knocks them making those mistakes and at the same time as the firefighter too I was working on an airlift rig which is basically means we're providing advanced life support to patients that went through all types of emergency rooms and one of the very common things was drug overdoses. And I was seeing all these different drugs and how nasty they are and obviously ran to cannabis all the time and there was nothing it was more innocent than alcohol created no problem. So through this whole process of being a firefighter and investing and learning a lot of things along the way my experience at cannabis ran across this industry. Oh my gosh this is something that's so compelling that there's no way I cannot focus on essentially Oh yeah you're not alone.

Dan Humiston:
Obviously have a lot of people are moving into this direction but before you got the cannabis you got to tell our listeners of addicts would explore explorer partnership I'm telling you this is one of the coolest ideas. If I would've thought about this at a college I would've been right with you.

Cody Shirk:
So when I was a firefighter I assumed that you know I was making good money for when I was young compared to my peers and I was very lucky in that I was working really hard and literally working 24 hour shifts like 20 days a month. So I was never home but on my days off I assumed that I was a small fish in a big part of us I was like No I gotta go outside the US to find these opportunities remnant dust and keep in mind I'm 24 years old thinking I'm going to strike it rich I'm going on to the world finding all these awesome opportunities that let me stop you there for a second.

Dan Humiston:
You're leaving out a big part of this that you're not telling our listeners but you're also a surfer so you're going on these you might be looking for investment opportunities where you're looking for a wave.

Cody Shirk:
Yeah. That's the second part I usually go and tell me but it goes like oh you're a surfer bomb and I'm like Yeah OK. So anyway I try to never visit the same place twice because I'm naturally curious so I go around the world looking for these waves and I know that real estate in front of waves for surfers is almost priceless. Surfers Yeah I get caught and they'll pay any amount of money to surf a great wave of you by land and part of these waves you are literally sitting on a gold mine. And that's what I did. I went through Central America and bought land up in finding really good waves in the middle of the jungle to do this crazy due diligence of finding the landowners and tracking down ranchers and farmers and speaking Spanish and losing lawyers going back to the city and chopping to the jungle and my right Snake. It was ridiculous. But I ended up doing really well and the real thinkers. I found this niche that they knew about and did really well and rolled over a lot of money into private equity and venture capital deals where they were high stakes. But yeah that was the impetus to go out in the world and start exploring and at the same time I was writing about it because somebody had said hey could you bring some interesting stuff you should write about it. Not so much to tell the people but more so to keep yourself in check so you can write down everything see where you've been and where you're going and kind of wanting a diary. I start writing about this and people were reading it and more and more people were reading it just kind of start expanding more and more and then eventually people were like hey I want to invest with you on these ventures.

Cody Shirk:
And I was like I don't want you to invest your money because I don't want you to travel and you're a weirdo and I'm doing my own thing. And of course very short sighted at the time and as they progressed and it is more and more I wrote Hey I need help with more but that's your sole leverage up the ability for you to do bigger deals because as one person you know you can do a lot as one person but eventually you kind of rise steam because you're out of time and capital frankly. So I started this group called explore partnership and essentially it's a private social and investing group and that emphasis on the social part is really cool because it's a lot of really like minded people who are actually curious and want to travel on and find interesting opportunities. And what we do is be present investing opportunities and we've done them all around the world everywhere from Ukraine to Colombia to Hong Kong to London. I mean literally everywhere. And one of the areas we've been really focused on several years ago was cannabis. And it's just so compelling for us that we were touring cannabis grows in multiple different countries running different companies and just all kinds of crazy stuff. So I know there's a lot there but that's the basic transformation of how I got to where I am now.

Dan Humiston:
So that private investing syndicate you put. Yeah there really is off so much. Was that the genesis for explore equity group.

Cody Shirk:
Yeah. So what we were doing is we are reforming SPV. We formed our equity group which is our investing arm of the company had separated from our partnership that way one of our members for some reason goes somewhere else and is not a member of the group anymore. The show a client for investing arms so we treat them just as we would any client for life for as long as you're a client. And we formed this group and we're investing in individual company and reforming SPV special purpose vehicles to invest into individual cannabis companies and some other areas. But I guess that we've got really involved the candidates and the process of doing it. Is it can be it's pretty labor intensive especially as we started to get better and better deal flow with the cannabis industry. You beat one person to the CEO of this company in that company and all of a sudden you're getting opportunities to invest in companies that the general public isn't even seeing. And so through this process we said hey this is crazy. We we're doing and asking me almost every couple of weeks is way too much work on our end in terms of the back end infrastructure and counting and emails and it was just it was out of control. So we said Hey we got a lot of funds but isn't saying we can actually do more deals faster. We can allow our execution but it's true that the companies that are trying to relay information back and forth turn batteries every day. And also we can take capital firms ushers who trusted us over the years and who don't want to deal with doing a lot of the work that we were making them do and they now trust us to have your money and that's the most rigid way possible.

Dan Humiston:
I just think it's so cool how it is and a roll from one great idea to the next great idea. This is one where it just seems like everything so sort of fell into place for you.

Cody Shirk:
So yeah I made it seem that way it might seem that way we're looking back and there are so many speed bumps and mistakes one can just take pains that we went through and an outsider may look like I can't see but underneath that with that jokey other dark look super calm on top of the water by underneath the laser just like paddling like crazy hole all the frantic and that's basically the story and for sure we've we've matured and grown and we were on a very good track now but it certainly hasn't been without its struggles and difficulties where you need to get banged up a little bit to get the street credibility and you certainly earned that when let's talk about explore equity group I know you invest in other sectors but focusing on cannabis what type of cannabis companies are you interested in investing in and who are some of the companies who you've already invested in. Yeah. So first some companies invested in cash bottles now Klitschko 1996 animals at a Colorado prohibited and in a variety of others that people by heard of. So we don't mind touching a plant. A lot of people say hey you know financially rescue we don't mind touching our plants who are pretty much industry agnostic. Obviously the ancillary services and the picks and shovels companies are very attractive but we also see value in brands they're touching the plant the only thing we try to avoid is investing in candidates grows where people are making money specifically from grow from selling cannabis. Now that's vertically integrated we'll look at it but we generally believe that the cannabis is a commodity just like corn or wheat or whatever so it's probably a race to the bottom on the pricing and we don't want to get stuck in that we want to be investing in companies that have a great brand a great service a great technology or pardon or anything that's really defensible for years to come. We're looking for those opportunities.

Dan Humiston:
Okay. You probably see a lot of deals.

Cody Shirk:
Oh yeah a lot so not too many.

Dan Humiston:
Yeah. The best way for a company to get their information to you and some advice as to how they can make themselves attractive to use are they get to the top of your pile.

Cody Shirk:
Yeah. Well first of all we look at everything. I'm a nerd when it comes to looking at all companies like I said I'm just curious about it and regardless if we're going to invest you might want to look I'm just one of those naturally curious people so I'm very good at answering e-mails. My knowledge is Cody at Explore equity and people email me everyday all kinds of their ideas and I encourage more people to do that. We will take a look at it and get back to you. Either way we'll say Hey this is really interesting we want more information or is point not a good time come back to us later or hey this just doesn't fit our esteemed profile at all. But either way we try and get back to everybody which is a lot of work but we believe it's the right thing to do and ensuring that we're respecting an entrepreneur's time and allows us to really get involved in that industry. If there's any way that they can make themselves look more attractive to you I think that's kind of that x factor and what is the perfect entrepreneur and obviously a track record helps but there's certainly a lot of younger people coming up with great ideas as well. I think the best thing for us it looks like attractive is just being brutally honest we despise it when companies come to us and they look perfect and they say oh they have no competition they have nonetheless know that we want to see a somebody approaching a problem and they're being very very critical about how they're approaching it and they're showing us the truth of what they're approaching and how they're going to correct it and what their challenges are if they are able to articulate that then we can become very interested because we understand that they have a realistic view of the problem they're approaching and how they're going to solve it.

Dan Humiston:
I think that's good advice overall if you just. Straight with people it's so much easier.

Cody Shirk:
I mean investors in general they're sold to every day and you get it getting sold to. So when you hear somebody just make this flowery story that has no downside or no rescue immediately you call B.S. on it because it probably is B.S.. So it's very fresh. You know it's fresh. See somebody come to you and show you their idea but also identify the problems and articulate why they need capital or help to overcome those problem dogs when it becomes much more believable.

Dan Humiston:
Oh this is something that actually does yeah it was really good advice.

Dan Humiston:
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Dan Humiston:
let's switch from the entrepreneur to the investor.

Dan Humiston:
So with all the traveling that you do I'm sure there's a lot of people outside the United States who are interested in investing in US cannabis market. Yeah.

Cody Shirk:
There are a lot and I think I know this that cannabis obviously a hot trend in the U.S. right now and most people know about it but from the outside world people don't know the actual laws of what's going on in the US being state by state laws are changing every day. The average in the US and Canada. I mean you go to some parts of Eastern Europe and they never fully understand that difference between U.S. and Canada just like we do understand a lot of the countries over there. So there's a lot of variation investors saying well this is a massive market that is literally being mocked right now. How do we get out and the U.S. and Canada in particular are really leading the way in terms of a formalized legitimate way to invest. And there is going to be a flood of money coming in but it's going to take time and there's going to be a lot of skeptical investors from the outside of the U.S. just because they don't know and that's part of our job and the industry job is to educate everybody about what's going on in a way that is so clear concise and legal all the way as well.

Dan Humiston:
Do you work with investors outside of the United States and Canada.

Cody Shirk:
Yes actually probably currently about 30 to 40 percent of our investors are outside of the US and Canada. So we're talking our from Asia to Europe and even into Latin America. So yes we we work with all kinds of investors.

Dan Humiston:
This is rolls me right into my next question if somebody wants to work with you guys and when it wants to invest in your funds what do some of the criteria that they'd have to conform to.

Cody Shirk:
I mean we don't really have criteria in the sense that we're not going to allow people to invest. Obviously you find our companies investing going to take money from any investor I shouldn't take any. But you know we're looking for people that believe in what we're doing and believe in our long term great vision and also understand that we're in this for a long time. We want to be partners with our investors because if they make money we're gonna make money. They don't make money well we don't make money. So we're right. This is very much a partnership and look for the long term so we want to ensure that we shake hands of the investors face to face we travel to meet them we want to make this a long term thing so we can all be successful together.

Dan Humiston:
And if they wanted to get in touch with you same way right to Cody.

Cody Shirk:
Yeah we're just. Yes for equity dot com or just go to extra equity dot com and you can find that out information already search my name online you can just send smoke signals and I'll find out who you are and you will be in contact.

Dan Humiston:
Well we've been speaking with Cody Shirk from explorer Equity Group and all of their information will also be on the MJBulls Web site. Well Cody thanks for being on the MJBulls Podcast.

Cody Shirk:
Dan thank you so much and thanks What you doing for this industry. I will say this industry does need to be cleaned up and nobody wants to grow up but that's the truth and that's all we need is we need more people sharing information about what's going on so it can be clear and transparent and move forward in a legal and and the right way.

Cody Shirk:
I appreciate you saying that but thank you for making that transition from although being a firefighter is very important.

Dan Humiston:
It's very important I don't want to undermine that but what you're doing right now you're going to be changing the world. So this is good. Keep it up.

Cody Shirk:
I hope we all do. I would hope we all do. Thanks a lot Dan.

Dan Humiston:
Let me take a second to think Trevett Hill for sponsoring today's show cannabis investors expect big returns from the companies that they invest in. Unfortunately not all cannabis investments succeed. Trevett Hill management team works with investors to help turnaround or in some cases purchased their underperforming portfolio companies to learn more go to Trevett Hill dot com.

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

Dan Humiston:
Today's show is produced by Buminit media with original music composed by Jamie Humiston Dan Humiston. You've been listening to MJBulls Podcast.

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