Rick Batenburg III is the Chief Investment Officer of Cliintel Capital Management Group (CCMG).
He is an accomplished venture capitalist in the cannabis space who has helped brands grow to national industry leaders.
In this interview, we ask the COO of Cliintel about his financial background and the background of Cliintel Capital Management Group, and how Cliintel has been operating in the cannabis industry.
Read the interview below on how investors approach the cannabis space, how CCMG is changing the cannabis investment game, and the benefits of working with an investment management firm for fundraising.
Ganjly: What is your financial background and how did you come about working at Cliintel Capital Management Group?
Rick Battenburg III: I went to the Business School at Nichols College in Massachusetts. After graduating, I worked at Merrill Lynch where I developed a taste for venture capital and began looking for an entry point outside of the constraints of a large firm. In 2015, my father and I formed Cliintel Capital Management Group (CCMG), a cannabis venture capital firm. CCMG became the first Qualified Institutional Investment capital firm in Colorado to own THC licensed facilities through a venture fund.
How long has Cliintel Capital Management Group been operating in the cannabis industry, and what made the industry attractive from an investment standpoint?
CCMG has been operating in the cannabis industry since its inception in 2015. While cannabis always sparked my interest from a recreational standpoint, on the latter— cannabis is a recession-resistant investment, which means we can never stop looking for opportunities.
What background do the principals of CCMG have in the cannabis industry?
CCMG was designed specifically to allow our investors to navigate the heavily regulated industries and the challenges those assets can present. We are focused on creating clean, reliable, and consistent experiences by controlling the contents of our family of products through intellectual property and standard operational procedures.
How is CCMG changing the game in terms of cannabis investments? What makes it different from other cannabis investment groups?
CCMG has a unique advantage due to its ability to allocate capital at different levels of the supply chain. With the “Qualified Institutional Investor” designation, classification and term created by state Senate Bill 16-040 that became law in 2017, it allows “qualified institutional investors” to own as much as 30 percent of a retail or medical cannabis business.
That gives CCMG the opportunity to not only guide businesses through its expertise in operations, products and branding but also take an ownership stake.
For a startup or an established company, what are the benefits of working with an investment management firm for fundraising?
The benefits of working with an investment management firm for fundraising starts with the professional development of the pitch itself— you have to understand your value within the context of the investor.
To understand your value, prepare the deal in a way that looks, feels and tastes like other deals. This will allow you to look the most professional and you can ask yourself, how will newer deals be viewed and how can my deal be better?
Why would investors prefer to work with investment management firms?
Because there’s a level of diligence associated with a deal that’s backed by a professional.
They’ll notice things an investor wouldn’t—there’s an implied sense of trust.
Can you share an example of how CCMG has contributed to the success of a company in your portfolio?
In 2019, CCMG funded and designed the acquisition of The Clear, a legacy California cannabis brand that is credited with being the first to bring THC distillate to market.
The Clear was all but defunct from mismanagement, but once we took over control it became the #2 cannabis brand in the state of Colorado.
What qualities are you looking for when determining which companies to invest in?
You have to look for three things when determining which companies to invest in:
Does the CEO of the company have the ability to do everyone’s job, but better?
Does the CEO have an emotional relationship with the success or failure of the company?
Do they know their numbers?
Do you anticipate any major cannabis policy/regulatory shifts in the industry? And what change would you like to see?
100%—I expect significant movement on the regulatory side for accessible markets, but also on the national scale.
I’d love to see many changes, but first and foremost I’d love to see 280E rolled back along with access for federally insured banks.
Where do you see the state of cannabis investing in 5 years?
I believe that most people will invest in public markets as they’re large and accessible. Private investing is all you can do right now in the United States— and while investors are betting on public companies, private U.S. cannabis companies are quietly being undervalued and overlooked.
Thank you, Rick, for taking the time to answer our questions and sharing your experience and knowledge from investing in the cannabis space! To learn more about Rick Battenburg III and/or Cliintel Capital Management Group, visit CliintelCapital.com.