Ford is now CEO of iAnthus Capital Holdings, which provides funding and advice to cannabis businesses. His story provides a great example that risk-taking, combined with a lot of background research, can pay dividends for CEOs willing to target nascent markets.
Ford was initially skeptical when contacted in 2014 by friend and former Goldman Sachs colleague Randy Maslow—who wanted help legitimizing the marijuana business—because he couldn’t see scope to scale it nationally.
But after attending conferences with industry participants the two men soon discovered growers’ main gripe was a reluctance by financial institutions to back their enterprises. That’s when the idea of setting up a merchant bank for pot entered their minds.
Initially, they couldn’t get seed financing locally but were able to find it in Canada and use the money to bankroll businesses in the U.S. The company now has investments in three states and is at term sheet stage in four more.
“There are some wild areas in California where you hear about Hell’s Angels and guys guarding their property with AK-47s,” Ford told the Stanford Graduate School of Management in an interview. “What I have seen is a bureaucratic, orderly transfer of wealth from the black market to the white market.”
Friends of Ford have called him a fool and warned he’ll end up in prison, but he said he hasn’t been shunned. “I don’t have a scarlet C painted on my forehead. I’ve always been very entrepreneurial; people probably always thought I was crazy to take those risks.”
His boldness looks like it could pay off even more. Recent polls indicate that California, Massachusetts, Maine, Nevada and Arizona are poised to approve referendums expanding legal cannabis use.
As reported this week by Bloomberg, shares in Scotts Miracle-Gro Co., once known for its lawn care products, have jumped 31% this year after the company expanded into the hydroponics market.
Meanwhile, in Colorado, where marijuana use is legal, chefs are even exploring ways to safely pair pot with food, according to the Associated Press.
America’s pot industry is forecast to grow in value by 26% in 2016 to $7.1 billion, according to a recent study, and could grow even more astronomically if states such as California legalize recreational use.