In an interview at the 2019 OurCrowd Investor Summit, Kachlon opens up about how his company’s $30 million fund for cannabis startups came to be, and where the industry is now.
Kfir Kachlon,
investment principal/canna tech lead at OurCrowd mid-interview at the OurCrowd Investor summit March 7th, 2019
Photographer: Harry Ehrlich
Kfir Kachlon, 33, is the investment principal and cannabis tech lead for OurCrowd, an Israel-based equity crowdfunding entity that focuses on investments in tech startups. The company’s founder is Jonathan Medved, a serial entrepreneur, venture capitalist and angel investor in Israel’s high-tech scene. He, along with Kachlon and Micah Tapman, a venture capitalist from a firm called 7thirty put together a fund worth $30 million to aid cannabis startups looking for small raises.
OurCrowd hosted an investor summit March 7th that included sessions about tech, entrepreneurship and the emerging cannabis industry. Here are the highlights from our 40-minute sit-down interview with Kachlon from the day of the summit:
Kachlon invests in other companies as well as cannabis — venturing into the automotive, technology and Artificial Intelligence sectors. But he says cannabis is his passion. And OurCrowd has been investing in it long before it became hot — starting back in 2014.
“In this ecosystem we see it growing every day. Everything is just getting bigger and bigger and bigger. New countries, new territories are legalizing cannabis and you understand that this is not something that is going to disappear. Here in Israel, we are lucky because we sit in a place where for the last 60 years, you had cannabis research.”
So the question remains: how is Kachlon a part of the $30 million fund that is going to help emerging cannabis companies? He explains that OurCrowd is fundamentally for larger companies, built to enable those who are looking for checks of more than $250-thousand. Right now, a great deal of the cannabis companies out there are smaller and are looking for less hefty investment. He realized that if he wanted to help them, he would need to partner with an existing fund. Kachlon narrowed it down from 20 to one, choosing 7thirty and its managing partner, Micah Tapman.
“He knows this industry through all its angles. He’s a very knowledgeable person about cannabis. He knows it deep down to the molecule level.
Tapman has invested in 93 cannabis companies, one of which became quite successful — BDS Analytics, a private company that produces data for the cannabis industry including market trend reports, analyses and consumer research. Data from this company is valuable since for so long, there was no quality data on the plant due to its prohibition.
“How much does it cost to grow — in acreage? How much is shelf space worth in a dispensary in Boulder, Colorado? In California? In Illinois? Those are very important to get the idea of what this industry needs. So that’s a company that we really love and we have under our portfolio.”
Kachlon points out some holes he’s seeking to fill when it comes to tech and research in the cannabis space:
“What [properties] do you have in a flower when you hold it? You have to destruct it. And then go for a big complicated chemical process to understand what you have in that flower. Some companies are trying to crack that by using non-destructive ways with smart optics, with a good data analytics and computer vision algorithms to tell you exactly what you have in each flower. So this is a direction that we’re looking at. We’re looking for technology to enable that research and not only research, but think about when you go to a dispensary. If you go to a dispensary and you pick a flower, a dry flower, you don’t know what you have inside. They tell you the percentages of the THC are ranging between that and that because they sent [only] one batch to the lab to get examined. [As opposed to examining each individual flower for precision].”
TipRanks tried to get more information about which of these canna-tech companies are in the pipeline for OurCrowd, but Kachlon said “Usually people will not give you their deal flow — it’s very confidential.”
To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here to read an interview with Micah Tapman. He address the struggles the industry is facing — including the difficulty in collaborating with packaging companies or distributors who hesitate to work with cannabis brands.
