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Canopy Rivers lights up the cannabis market one investment at a time

Jackie Gill - September 23, 2019 Narbé Alexandrian, CEO of Canopy Rivers, says tech and cannabis have a lot more in common than you think
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What do cannabis and tech have in common? More than you might think – especially if you’re an investor.

First, there’s the size of the opportunity. Back in 2011, forecasters expected global tech purchases to reach over $1.6 billion. Today, the cannabis market is $600 billion in the making, according to Canopy Rivers CEO Narbé Alexandrian.

Then there’s an ever-changing market. In tech, it’s a revolving door of new technologies, new approaches and new regulations. Not so different from cannabis, as legalization sweeps across the world in different shapes and forms, with new ways of growing, cultivating, extracting and retailing emerging.

Don’t forget the brain drain, where bright ideas and top talent flock to areas where the investment dollars live. In tech, that was Silicon Valley. In cannabis, it’s still up for grabs. And Canopy Rivers wants to make Canada the go-to place for investment, Alexandrian says.

“Canada has the advantage now. Why don’t we create that same system, the same structure within the cannabis space and go after these companies and talk to them?”

Canopy Rivers wants to make the most of that advantage, as a venture capital firm dedicated to growing the cannabis market at home in Canada and across the world. With 17 companies currently in their portfolio ranging from greenhouses equipped with high-yield growth systems to media companies that cover all things cannabis culture, their claim to fame is covering the entire value chain.

Or, as Alexandrian puts it, “We want to be ahead of that and go find these great companies, create those relationships for potential investment opportunity in the future.” 

Blazing a trail for entrepreneurs

If there’s one person who understands the intersection between tech and cannabis, it’s Alexandrian. He’s just completed his first year at the helm of Canopy Rivers, with a track record that includes OMERS Ventures, a leading global investor in disruptive technology companies.

WATCH: Narbé Alexandrian on getting noticed by investors

Alexandrian is a bit of an entrepreneur himself, dating back to grade school when he’d burn custom mix CDs in his basement. “I made a business out of that. All the money that I got, I bought better CD burners to make them faster and make more,” he says.

He pursued accounting as a profession, but it just didn’t click outside of his classes at York University’s Schulich School of Business. In fact, he remembers the moment he decided to make a change.

“I was looking in the mirror right before I was supposed to go [into work],” he remembers. “I told myself, why am I shaving for something I don’t want to do?”

So he took a step back and asked himself what he really loves. “I love technology. So I went and joined a startup,” he says.

“I told myself, why am I shaving for something I don’t want to do?”

– Narbé Alexandrian, CEO of Canopy Rivers

But that didn’t quite scratch that itch. While he worked on cool projects, he really missed diving into all the different kinds of businesses and business models that came with his old life.

That led him to investigate the world of investment, which looked promising. “You’re seeing so many cool businesses. Every business that comes through the door wants to tell us everything about them,” he says.

“Seeing the entrepreneurs and the companies and the disruption, and everyone being so hungry to make a change in the world and also makes some money on the side as well… all that put together, it really entices me.” 

Sparking opportunity in a startup market

Canopy Rivers isn’t just the next step in Alexandrian’s story; it’s also the next step in the success story of the companies in their portfolio.

Those companies span 13 different areas of the cannabis value chain, which Canopy Rivers split into 97 sub-segments. And of those sub-segments, they focus on 15 to 20 that form the foundation of their investment thesis: that vertical integration isn’t going to work unless you have a lot of cash, and instead the market will develop horizontally with businesses that do one thing very well.

READ: How does Canopy Rivers invest? Here’s an overview.

Canopy Rivers supports the 17 companies in their portfolio through their Impact Team, which combines their in-house expertise with the on-the-ground know-how from their portfolio companies in one ecosystem.

“There’s no issue that we haven’t been able to solve to this point. It’s just a matter of using our resources and time wisely.”

– Narbé Alexandrian

Trying to emulsify cannabinoids into a drink without creating a salad dressing effect? They have the answer because they know companies that are already doing it successfully. Building a top-of-the-line facility? They have a network of growers and researchers on the bleeding edge of cultivation. The same goes for extraction, regulation and more.

“What I like to say is, on day zero we invest; on day one, we get your first customer because we’ve known the need in the market and the pain points, and we know the people needed to solve it,” he says.

“There’s no issue that we haven’t been able to solve to this point. It’s just a matter of using our resources and time wisely.”

“Seeing the entrepreneurs and the companies and the disruption, and everyone being so hungry to make a change in the world … it really entices me.” 

– Narbé Alexandrian

Canopy Rivers is scaling as a venture capital firm as well, having launched in 2017 as the investment arm of Canopy Growth Corporation. In that short time, they’ve been busy doing everything from building a database of 1,500 pitches to putting processes in place to make their day-to-day operations possible. “If anybody gets hit by a bus that the firm could still go on, a company could still go on,” he says.

That comes with its own challenges in an industry that’s always changing, Alexandrian adds.

“We’re just trying to find out how this industry is going to evolve. What geographies are going to really pick up? What use factors are going to pick up? What are governments going to do? How’s pricing going to affect this decision? How do we move an illicit market to the legal market?” he says.

WATCH: Canopy Rivers on keeping up in an ever-changing market

For themselves and the companies they serve, “These are all the questions that we’re trying to answer every single day in different ways, shapes and forms.”

New growth for tomorrow

Although they can’t perfectly predict the future, Canopy Rivers has their eye on five key areas as the market matures.

It starts with cultivation, which is the first step in any new jurisdiction opening its doors to cannabis, Alexandrian says. Then there are ancillary products, like fertilizers and lights that improve grow time and plant yields.

Coming in third is consumer packaged goods, which is where brands start to make a difference. “Brand is something that hasn’t really been developed in this space,” he says. “What we’re trying to do is find ways to get ahead of that, find out which brands are really creating that sticky power in the customer’s head.”

The fourth wave is pharmaceuticals, which take a bit more time because of the time clinical testing can take, he says – but there’s a huge opportunity in biosynthesis with the potential to create CBD in the lab, instead of in the greenhouse.

And finally, there’s mass market. “This is when an industry is dominated by three to five major companies, and these companies really dictate how the industry progresses,” he adds.

“What we’re trying to do is find ways to get ahead of that, find out which brands are really creating that sticky power in the customer’s head.”

– Narbé Alexandrian

So amid all these opportunities, where is Canopy Rivers going next?

“Our next goal is to do exactly what we’re doing,” Alexandrian says. “Find the new geographies that we want to enter into, find the new plays and the new pieces of the value chain that we want to focus in on, find the ways to help our companies continue to grow.”

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  • Name: Canopy Rivers
  • Solution: Venture capital firm specializing in the global cannabis market
  • Owners: Narbé Alexandrian, CEO
  • Headquarters: Toronto, Ont.
  • Founded: 2017
  • Contact: [email protected]
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