Venture Capitalist/Real Estate Investor-turned-Cannabis CEO Says Premium Pot is the Market’s Biggest Opportunity
Norton Singhavon is CEO at GTEC Holdings, a vertically integrated cannabis producer with a range of companies under its umbrella.
What makes your company different from others in the cannabis space?
We are focused on the premium segment of the market and are vertically integrated. Controlling the value chain from cultivation, extraction, testing, retail, and e‑commerce. Most of the “Big 5” are vertically integrated. However, beyond the Big 5, there are only a few others who are vertically integrated. We believe that we will provide a premium product with superior genetics to the market.
How did you get into the cannabis space?
I was always two things: a venture capitalist and a real estate investor. Eventually I was asked to purchase commercial real estate and to lease to prospective cultivators or retailers. I started financing the construction and equipment involved in developing these assets. I found that most of the groups I had financed had lacked the sophistication [necessary] to enter into a competitive landscape. They needed some of the required acumen in marketing, branding, distribution, and financing. So eventually, I became a full-time cannabis venture capitalist and, to date, I have been responsible for deploying over $100 million into the sector, with a strict mandate of active investments.
Walk us through a normal day.
I wake up anywhere between 5AM and 5:45AM, have my routine of taking the dogs out, making breakfast, and getting the day started early. Being in the west, my phone and e‑mails start going at 5AM usually. I will catch up on e‑mails, then drive to the office. Upon arrival, I am usually bombarded with a gazillion items from anyone and everyone, which is why I usually try to beat the morning traffic and everyone else, to be the first or second into the office.
Typically, my day is about one third calls, one third computer time (e‑mails or reviewing something), and one third boardroom meetings. I also break my week down consistently, in which I try to stack all my calls on Mondays and Tuesdays; do any travelling, facility site tours, or operational meetings on Wednesdays and Thursdays; and a full day back in the office on Fridays.
What has been your biggest lesson about working in cannabis, and in business in general?
I would have to say my biggest lesson is to not underestimate others and to not judge a book by its cover. I have met some of the sharpest industry experts in this sector, who looked like they just rolled off a 15-hour shift as a seasonal berry picker, and who, in fact, own and operate 300,000 square feet of of cultivation. Some of my biggest investors in GTEC are humble Alberta families that you would never expect to have the serious wealth that they do. Being raised in a traditional Chinese household, I was taught to always respect everybody and not to be so quick to judge. I have seen others make the mistake of discrediting others, simply based on appearance.
What do you see as your biggest opportunity?
We see the biggest opportunity in cannabis as this premium segment of the market. All of the Big 5 seem to be focused on greenhouses and capacity. What ever happened to producing a superior product, and creating consumer and brand loyalty from it? I anticipate that we will be quite disruptive to this market segment.
What sets you apart to make you a leader in cannabis?
I don’t really know to be honest, I feel like I would be complimenting myself. You’ll just have to ask one of our thirty staff :)
I do feel that one of my strongest attributes (or one may argue it’s a curse) is that I can get extremely OCD with things. That may be a vision, idea, or thought. And it becomes one of these things, where I cannot sleep, think, or eat until it is executed. This really takes effect when we have a challenge to overcome or to troubleshoot.
What is the most frustrating aspect of the cannabis industry today?
The negative stigma that some people still have. Recently I had a commercial realtor answer our call and say, “We WILL NOT lease to your type.” I wasn’t sure if that meant he was against cannabis or a racist. All jokes aside, we still deal with this all the time. I was almost booted from TD Bank three times for being involved in the cannabis industry. It kept going into corporate head office compliance for review, and would always come back that I was “allowed” to remain a client. I am now slowly moving everything over to BMO [Bank of Montréal]. I do believe the banking issues have loosened up now, but I’ve had to endure this for five years or so.
What advice would you give to anyone looking to get into the cannabis space?
If you are entering as an entrepreneur, build a solid team around yourself. You need extremely loyal, dedicated, tenacious, and efficient people around you that can execute. I have been extremely blessed to have a core group around me with a foundation built like this.
If you are entering as an employee, attach yourself to the aforementioned team.
What are your biggest tips for branding cannabis?
I am not a branding nor marketing expert, but have surrounded myself with those who are subject matter experts. I would say it is important to have multiple brands for diversity, but don’t lose focus on the market that will be your largest revenue generator. I still believe that the 80⁄20 rule applies in cannabis: 20 percent of your consumer base will be responsible for 80 percent of your sales, [but] do not lose sight of that 20 percent, whatever your niche demographic may be.
Do you see any big changes coming in the future of cannabis?
I think money is getting smarter and companies will eventually have to justify their exorbitant valuations. Trading at 50 to 60 times of forward EBITDA [earnings before interest, tax, depreciation, and amortization] doesn’t make any sense at all. You look at pharma or spirits, which are much more reasonable and trade around 12 to 18 times EBITDA. Currently GTEC trades about four times, based on forward EBITDA.
Do you consume cannabis? And if so, what’s your favorite way to consume?
Technically I am legally not allowed to, as I am not a qualified medical patient under Canada’s ACMPR, so I would be breaking the law :)
However, when I am in Las Vegas, where recreational consumption is legal, I do like to pick up an indica dominant distillate vape pen that helps me fall asleep and stay asleep. I have one of those minds that is always racing 24⁄7.