CANNABIS investor Artemis Growth Partners is looking forward to a stellar decade after establishing a serious investment track record – just three years after its launch.
Established in 2017 with $5m funding from friends, family and the three founding partners, Artemis has successfully boosted total funds raised to $130m.
This has been invested into almost 30 companies and now carries a, recently assessed, value in excess of $200m.
With additional capital in the pipeline it sees multiple opportunities across the whole cannabis space. These are distilled using four key metrics – its investment quadrants.
Four Opportunity Streams
Co-founding General Partner Will Muecke previously worked in New York for Goldman Sachs, as Managing Director of its Global Healthcare Investment team.
Now based in London, he spoke at length with BusinessCann on his passion for the industry and its growth potential for investors, entrepreneurs, businesses, the medical community, patients and consumers.
Running through its quadrants he initially identified opportunities it seeks in brands, with this being primarily focused on the adult-use market in North America, at this moment in time.
Secondly, it considers distribution, with this being split between consumer packaged goods in North America and medical cannabis in Europe.
He said: “Our broad view is that North America is more of a consumer play, where brand and distribution are the hallmarks, with a focus on CPG (Consumer Packaged Goods). Europe, on the other hand, is mainly medical for now.”
He went on to say this will change as attitudes towards medical and recreational cannabis across the European continent shift.
While Artemis has looked at low-cost cultivation, it believes that, with cannabis essentially being an agricultural commodity, there is little scope to differentiate in this market; Artemis ‘aims to add value’, he says.
To this end, Artemis has more of an interest in downstream extraction businesses or API (Active Pharmaceutical Ingredient) pharma – ‘something beyond purely cultivation’.
The fourth quartile is service businesses, but its plays have been limited, as Mr Muecke explained.
“With ancillary and point of sale businesses we just never saw anything we liked. On the payment platform side we see Visa displacing everyone else and likewise on the inventory management side with Oracle and others.”
He continued: “We are still looking at software plays – data is interesting; it doesn’t have any borders. We are interested in service companies, non-plant touching businesses, as well as those making devices.
“These quadrants are our thematics and they can be applied to different markets, on a global basis.”
A European Foothold
Last month saw its largest investment to date into Lincolnshire-based Bridge Farm, the UK’s largest supplier of flowers and herbs to supermarkets such as Tesco and Morrisons.
Elsewhere in Europe it has a stake in Aureum, a Danish medical cannabis extraction firm and CBD firms CBVIT, and PhytoPūr Bio, with facilities in the Czech Republic.
In the UK it also has a stake in NOBL, a data and intellectual capital firm which also organises the annual Cannabis Europa event in London.
Large Hedge Fund Partner
Artemis currently operates six registered investment vehicles, raising from accredited investors including; ultra-high net worth individuals, high net-worth family offices, some smaller institutions, and a hedge fund partner – its largest investor – that invests in the space through it, said Mr Muecke.
Successful exits for Artemis include last year’s sale of its stake in the US CBD brand Lord Jones. This business was sold to Canadian Licensed Producer Cronos for a total purchase price of $300m.
Artemis has stakes in major US players such as distribution and CPG brand Green Thumb Industries, and publicly-listed, multi-state operator Columbia Care.
Licensed producer Sundial of Canada is an investee business, as is vertically-integrated distribution and retail business 4Front Ventures Corp which is listed on the Canadian Securities Exchange.
Mr Muecke elaborated: “We haven’t changed our investment themes since we began. While we are US-based and with US investment vehicles, when we set out to launch Artemis we really took a global view.
“We have been operating outside the US raising capital with the view that cannabis itself is a global opportunity, while each region will have a different complexion, the targets for our investments for the quadrants of the value chain, are the same.”
Prior to launching Artemis with his partners – who choose to remain unnamed due to sensitivities relating to the federal illegality of cannabis in the US – Mr Muecke ran an impact investing programme in Latin America for the World Bank and a number of European Investment Banks.
The Artemis core team also has investment banking experience at JPM, and Mesoamerica. They are complemented by operating partners who have built and run cannabis businesses.
This team is supported by an advisory board from blue-chip global wealth management, multi-nationals, leading biotech compliance and entrepreneurs.
Artemis says its investment professionals and advisors comprise a broad team that is multicultural in substance, is both gender – and racially-diverse – and includes members of the LGBTQ+ community in both senior and staff positions.
‘The Right Side Of History’
This focus on impact and diversity is key to the DNA of Artemis; it defines itself as an Environmental, Social, and Governance (ESG) investor.
Mr Muecke elaborated “We are not just in this for the money, we are in this as we believe we are on the right side of history, that cannabis should be legalised and we want to just make sure it is done the right way.
“With our track records, and our large networks, we see this as an industry on which we hope we can leave our fingerprints, from an impact and sustainability viewpoint.
“Our view is that we are here to support the growth of the whole industry. There are a lot of great companies that, for whatever reason will not fit into our portfolio, but we still connect with them and advise where we can. We are not passive investors; we try to be active in everything we do.”
Earlier this week BusinessCann published Mr Muecke’s view on the state of the global cannabis market concluding cannabis is projected to be the ‘world’s fastest-growing industry’.
Future Investment Targets
Looking to the future, Mr Muecke says its investment focus is likely to be European CBD, the opportunities resulting from a global focus on health and wellness in the Covid-19 world, and bridging the knowledge gap that will allow medics to embrace plant-based medicines.
Over the coming months and years Artemis will use its quadrant market metrics as the base for its strategy. Mr Muecke added some additional layers to this dynamic.
“We are currently spending a lot of time understanding the evolution of the CBD space, other than CBVIT we haven’t made any plays. There are gong to be some CBD brands which emerge, that will have traction.”
For Artemis this may involve supporting a portfolio US brands into the European market.
He continued: “An immediate focus here in Europe is giving capital and stability to Bridge Farm as it becomes independent once more. This will allow it to expand into traditional horticulture as well as looking for new opportunities in cannabis.”
In this regard its relationships with supermarkets, such as Tesco and Morrisons, will be beneficial, he adds.
He sees the overall plant-based wellness value chain as very interesting.
“Post-Covid the trend is going to very health and wellness focused. At no other time in recent history has health and wellness being so much at the centre of global events.”
Artemis is also looking at something which could accelerate patient enrolment, with Mr Muecke saying this is the ‘biggest bottle-neck right now’.
“There is no doctor in the world that has ever gone through medical school and has been taught a module on cannabis.
“All the education has come through programmes which are essentially just marketing extensions for some of the major licensed producers
“We are looking at things we can do to help educate doctors to have more of a front-line approach. Right now, in Northern Europe, cannabis is the last line of defence rather that the first line of prescription.
“The world is a little bit tired of small molecule pharma and we’d love to see phyto-medicine be much more accepted in the front line.
“Even if it doesn’t work, there will be no harm done, and then you can always go back to small molecule after that.”
Throughout our conversation Will’s passion and vision for Artemis and the industry is evident. He conveys a deep admiration for the cannabis plant and demonstrates a burning ambition to support the growth of a global movement which will see it welcomed back into society’s mainstream.