[Interview] Bruce Linton: «The aim is to get there early».»

On the occasion of launch of Oskare Capital, We interviewed Bruce Linton, founder of Canopy Growth and Chairman of Oskare Capital.

This interview has been edited for clarity.

Newsweed: For many cannabis entrepreneurs, you're the person who built a $10 billion empire from scratch. How would you describe yourself to someone who doesn't know Bruce Linton?

Bruce Linton: I'd say I didn't start out with cannabis and I don't expect to end up with cannabis. There are many reasons why Canopy was and is the largest cannabis company and I think that's because we thought international, we thought growth, we thought intellectual property.

This whole process starts when people talk about how they grow a plant, then about the quality of the flower and why it's of superior quality. But quickly the conversation moves from grams to milligrams. This milligram conversation is about the science and how you get everything out of the plant, then how you put it into a format that will achieve its purpose, whatever form it takes, in a drink for recreational use or in a dispensing system for a specific geriatric disease or veterinary care.

I'd describe myself as someone who's very interested in how we keep changing things, so that we have more and more disruptions in a bigger and bigger market. And so when I was made redundant, I think we had a very disruptive platform for beverages and alcohol, for the elderly, for veterinary care.

Today, we want to do the same thing in Europe and I think the scientific and pharmaceutical expertise and the academic integration into a good regulatory platform, means that between the UK and Europe, if we have capital, we could take several technologies and bring them into the cannabinoid world and be very disruptive and scale up.

NWD: Today you're focusing in particular on investment and financing. What are the trends in cannabis investment?

B.L.: Then I'd say that future trends depend on each type of product, whether it's hemp fiber or rare cannabinoids, or recreational products that are really effective. The bottom line is that each product category is unfinished. Every category has a sequel. Imagine that in veterinary care, you add 1 more year of quality life to your old dog. How much do you pay for that? For each segment, we can offer something. It's incomparable to anything else I can think of.

NWD: You're launching an investment fund in Europe, Oskare Capital. Why do it here and now?

B.L.: I've been in Europe for a long time. The company I set up was the first to import cannabis from the Netherlands to Canada. The first North American company to ship to Germany was the one I set up. We operated in Poland and the Czech Republic. In Denmark, we built the first production asset, in Germany too, we were active with hemp in Spain, we have in-house operations in Italy. Through Canopy Rivers [Canopy's venture capital subsidiary], we financed an EU-GMP extraction and pharmaceutical platform in Italy. We signed an agreement with a company in England to use their intellectual property.

So I've been active in 6 or 7 countries for several years. And I've welcomed many regulators from many European countries to Canada and from other countries outside Europe to understand what Canada was doing and how we implemented it.

I think I have a very good knowledge of the market, the regulatory framework, the regulations needed for a particular cannabinoid. I was in Greece in November to push the regulators on their medical market and explain why they should open up a recreational market.

And then we met the right group of people and created Oskare. But of course, it's not as if I took advantage of my redundancy last July to see what was going on in Europe. I was already in Europe. We've made 3 big acquisitions in the UK / Europe, we bought Storz und Bickel, we bought C3, the biggest THC supplier in Germany, and we bought This Works in the UK to create a CBD platform. So it's very comfortable to already know the market.

NWD: Have you encountered any difficulties in setting up a cannabis fund in Europe?

B.L.: Look, I hope it's hard and I expect it to be hard. Because you know what happens when it's hard, most people don't make it. The Canopy financing took 16 rounds of financing, which was a little difficult. The Rivers financing took 5 rounds of financing. During Covid, I raised 4 times, once for $150 million for a hemp discussion, $10 million for Vireo, $6.5 million for software. I expect it to be difficult. You can't control the difficulty, but you can control your reaction. So I think we're well placed to react and succeed.

In about 2 years, doing this in France or the United States would be a great idea. Everyone will be doing it. The problem is that we'll already know what the opportunities are, where the technologies are. Part of our expertise and purpose is to know where to be the first to invest and help companies protect their intellectual property. And so, following us will be a challenge because we'll have our network and our activities underway and people will succeed with us.

NWD: What is the fund's strategy?

B.L.: Think of the companies that are forming around great ideas that have been developed outside cannabinoids. And working with these companies by providing them with the necessary capital is a great opportunity for us.

The aim is to get in early, protect their intellectual property, move the company forward, get them initial capital and bring in our network and more capital as they progress. So people will see us as the foundation for the next wave of investment and as a helper, a mentor. And we'll bring in more money from our funds and other funds because a lot of funds don't want to go that early. They want to go A-round, B-round. We want to be there early. It's a bit more work, some people say there's a risk, but you know what, the risk can be mitigated by being very good at selection. And it's also rewarding because the price is pretty low compared to a publicly listed company with a $5 billion capitalization where you'd have to put a lot of money in.

NWD: Have you ever financed companies with Oskare Capital?

B.L.: Yes, we financed one [editor's note: Octarine Bio, a Danish company]. That was while we were busy financing our fund. We like it a lot and I wish we'd finished putting our fund together because I'd put more money into it now. If our fund had been done, I bet we would have put in $2 to $5 million so they could go to the moon.

NWD: As an investor, how do you see France? Are you ready to invest here?

B.L.: France is a perfect example. The fund is not being set up today because the market is perfect. The market isn't perfect. The fund is being set up today because the combination of technology and evolution and the results it can create must be ready when the market is ready.

And France allows people to do research. I'm working with a company in France, I won't say which one, they have a very new approach on how to create a diversity of rare cannabinoids and non-rare cannabinoids. This work can be done in France with licenses.

And so you'll see that we probably have investments to go from Denmark to France, and it's going to be institution by institution, business by business, idea by idea, and so our portfolio will be very diversified.

NWD: The cannabis market can be a green dream for some. What would you say to an overenthusiastic entrepreneur?

B.L.: The number-one problem with entrepreneurs, whether in software or cannabis, is that they get very excited about their innovation and promise a lot.

Instead, they should focus on why the world needs what they have. And tell themselves that if they're lucky, if they work hard, it just might work. Instead, people tell me «my extraction method is perfect. We'll have a market share of 50% in 1.5 years, our company will make a billion in revenues». So the probability of disappointment is high.

The problem is that they try to fool the investor by getting too high a price for their shares without diluting themselves. They want to keep it all for themselves. I've always taken the other approach. It's better to have everyone in the company with you, and to be in a company where everyone wants to invest.

Remember, we took 16 rounds to finance Canopy and 6 years to build it. In each round, the previous day's prices were lower than the next day's prices. For 16 rounds in a row, people made money. And the reason that's important is that when you make money, let's say it goes from 1 million to 2 million valuation, when I call you needing more money, you call me back, you come back, and you make money.

Some people with valuations so high and their promise so big make 1 round of financing and have so much pressure on them that nobody makes any money. So it's better to slow down, share, come back more often and show that you're moving forward rather than trying to value yourself highly and feel protected. You can't protect yourself, you can only accelerate and make yourself valuable.

NWD: And what would be your advice for realistic cannabis entrepreneurs?

B.L.: Part of the problem we're trying to solve with Oskare is who's reasonable and who's not.

If you want to start a business, do it for at least five years. If you do it for 5 years, the field you're in today will have been made easier or harder by your work. Are you going to make people win with you, or are you taking a gamble that nobody can win?

If your goal is to go sailing and play golf, and you need to get rich to do that, maybe you should buy a lottery ticket. That's not what makes an entrepreneur. The moments I love in the businesses I've built are taking you around, showing you the building and explaining everything we've done, why we've done it and how it works. Because that's when the brain works and people's hands create it.

The second tip is the amount of energy people had by having a good work environment. When you come to work, you get energy, you don't lose energy. An entrepreneur's job is to be a leader. Are you leading people in the direction you want them to go? Do they enjoy coming to work? Do they work to get the job done as quickly as possible, simply because they can't wait to get there?

NWD: And finally, would you invest in a cannabic media outlet?

B.L.: No, but it's funny because it's hard for media companies to raise money. If I had to invest, I'd take Newsweed and Cannabiz and a couple of domains and merge them together, and make it so they could be a little more international, a little bigger but still have a local hold. Because I think, I hope you're making money, but it's very hard to get advertising and revenue in what you're doing, and it's hard to get subscription revenue.