How to manage your cannabis investors

One of the most important and frustrating jobs a private or pubco CEO (or CFO) must do is manage their investor’s expectations.  

Investor management is not easy and dropping the ball can trigger infighting, missed opportunities and legal action .  The typical cannabis firm often has a convoluted and diverse cap table, which includes: friends & family, angel investors, executives & board members and investment funds.  These investors will usually have very different securities, rights and goals.

One best practitioners I know is Simon Tankel, the CEO of Texas-based tele-medicine and psychedelics company, Heading Health Inc.  

What does Simon do?

1.     Knows his investors – Simon understands who to seek guidance and introductions from and who wants to be a passive shareholder.  He also is not shy or arrogant enough to ask for help or to seek out another perspective;

2.     Fosters transparency - When it comes to corporate news, Simon doesn’t sugarcoat things nor does he blatantly sandbag expectations i.e. slyly setting a low financial or operational bar he knows he’ll easily exceed.  He tells it like it is;

3.     Communicates well – Through a regular cadence of articulated phone calls & emails, Simon consistently channels Dr Seuss, "Saying what he means and meaning what he says";

4.     Sets boundaries – Simon is accessible but not too accessible. He recognizes that spending too much time on investor management will detract him from executing on other tasks that directly build shareholder value;

5. Pays attention to administration – When it comes to documentation, Heading makes sure they dot their “Is” and cross their ‘Ts’’.  Everything is documented using software that automates investor administration activities.   Finally, Heading’s regularly published cap table and financials are habitually accurate, comprehensive and easy to digest.

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