In an interview at the OurCrowd Investor Summit, Kfir Kachlon, the investment principal and cannabis tech lead for OurCrowd, opens up about how he became introduced to the business, how his company’s $30 million fund for cannabis startups came to be and where the industry is at now.
An on-court basketball injury doesn’t always end with a business plan. In fact, many who start using painkillers to deal with injuries never quite stop. That wasn’t the case for Kfir Kachlon, who tore a ligament in his groin while playing for an amateur basketball team. It took 8 months for him to recover. That’s when he started taking percocet to numb the pain. After dabbling with the opioids for pain relief, he discovered the benefits of cannabis during a two-week vacation to Amsterdam with his wife. Kachlon’s physical therapist recommended he try marijuana.
“My physiotherapist told me ‘you’re going to Amsterdam. Why don’t you try weed? I was like wait why? No, no, I’m not. I did not know anything about weed and its medical properties. It doesn’t heal you. It helps you get into the physical or mental state where you don’t feel the pain when you stretch and then you can do your physiotherapy exercises that rehabilitate you. And that’s how I became a believer in cannabis. I said if that worked for me, what else can it do?”
Following this experience, Kachlon continued to use cannabis, but it was through illegal means. He first approached a doctor seeking a prescription for medical marijuana, but the doctor denied him, citing he was a young athlete and didn’t need it.
“Now you see me here walking! I don’t play basketball anymore. But I do cycle a lot. I’m on the bike every day and cannabis has been great for me. And when I started working for OurCrowd, from the get go, I said O.K. I want to research as much as I can [about cannabis]. It’s a new industry that I believe has a lot in it — more than what is already known.”
“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.
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].”
To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.