BY JEN HUDYMA
With new products consistently hitting the market, and ancillary businesses being created to meet the needs of this new industry. In a time when women have more access to capital and business training than ever before, it’s essential that we support their small businesses. Groups like MJBA Women’s Alliance and Women Grow have created opportunities for women to connect in a professional setting to expand their startups, or just find their niche in the emerging market. Women Grow, and the national organization’s founder Jane West received some attention for the progress the organization has been making in this month’s Newsweek article “Women in Weed.” I have been attending the Portland Chapter of Women Grow’s networking events the last two months, and I’ve encountered women with successful grow operations, edible companies, dispensaries, budtender training programs and other ancillary businesses. ArcView Market Research states in their 2015 Executive Summary on The State Of Legal Marijuana Markets, that the “cannabis industry expanded 74% [in 2014]to reach $2.7 billion in combined retail and wholesale sales, and firmly established itself as the fastest growing industry in America.” With Oregon, Alaska and Washington D.C. legalizing recreational marijuana in 2015, and more states projected to legalize in 2016, women need to act now to get in on the ground floor.
“This industry is really one massive startup. Because it’s so new, we have an opportunity to build it differently from the outset and make it more equitable and inclusive than tech and other industries that have delivered massive upside to a largely male community of stakeholders” said Sara Batterby, Founding Chair of Portland Chapter Women Grow, in a recent conversation. Batterby is also CEO of HiFi Farms, an early stage cannabis cultivation company as well as being a founding partner with Elemeno Ventures, a boutique investment fund in Palo Alto focused on investing in female entrepreneurs in tech. She also volunteers as an Advisor for Astia, an angel investment group that invests in a majority of women founders. After two decades of experience in start up, operations, business development and marketing, she recently brought her skills to Oregon and decided to put them to work in cannabis. Batterby has a history of articulating the business case for investing in women, and wrote a 2014 post on the “Top 5 Reasons To Invest in Women” which, I believe, is easily transferrable to female entrepreneurs in the emerging cannabis industry.
The first reason mentioned in her article is valuation, or the process of determining a company’s worth based on available capital and assets. From past experience being pitched hundreds of startup ventures, Batterby has noticed a consistent trend of women approaching investors with practical and realistic assessments of the value of their startups and more traction before they consider themselves ready for investor capital.
Secondly, Batterby discusses the ways women have demonstrated themselves to be much more efficient with startup capital than men in similar situations, quoting a report by Kauffman Foundations that found “women are 35% more capital efficient in the first year after VC [venture capital]funding than their all male led counterparts.” This is a significant margin, and in the early years of a startup this fiscal responsibility can mean the difference between success and failure.
Resilience is next, which Batterby says is a “function of diversity”. It’s true, in nearly all situations, that having a more diverse team of people at your disposal will lead to greater success in recovering quickly from adverse situations, which is crucial to the longevity of any company.
Balance comes in at number four, and is created by diverse investment, rather than the tendency for predominantly male owned and run companies to invest their capital back into startups that mirror their own demographics. When this happens “there is no meaningful meritocracy at work and one group is over rewarded while a huge reservoir of talent and value is being unrecognized and unrealized.”
Lastly, Batterby implores future investors to “Do the Math,” quoting several statistics relating the success rates of startups led by women, and citing the rapid advancements that women are making in industries that they have previously had little access to. This historical lack of access to industry and the capital necessary to succeed may contribute greatly to the pragmatic approach taken by many women when entering into a new business venture. These women may be accustomed to doing more with less, and place more importance on relationship building within communities. If you look at the statistics, having a more diverse set of business owners in control of capital will create a stronger organization and secure a better chance of a strong return in upcoming years, which will lead to an eventual redistribution of capital and power.
“If we all do this right, and approach this with the right mindset,” Sara says of the emerging presence of women in the cannabis industry, “we will build an industry that is completely different in terms of the way that it distributes wealth into our communities because of the participation of women. And, to me, that’s a massive opportunity, and it’s a privilege to be involved in doing something like that.” Batterby and Co-Chair Leah Maurer have led the Portland Chapter of Women Grow to become the largest and fastest growing Chapter in the nation. Congressman Earl Blumenauer will be the Keynote Speaker at their next monthly networking event, on September 3 at Jacobsen Salt. Buy tickets to that event here.