Authority Magazine
Sep 12 · 4 min read

I had the pleasure of interviewing Dan Zaharoni. Dan has been a California-licensed attorney since 1992, in addition to being a licensed Real Estate Broker and licensed General Contractor in the State of California. Over the past 15 years, he has developed multiple real estate projects throughout the southwestern United States in the commercial, residential and hospitality sectors. Mr. Zaharoni acts as General Counsel for FTE LLC, coordinates the company’s legal, regulatory and compliance requirements as well as managing its real estate acquisition strategy. He is a graduate of UC Berkeley, ’89, and Loyola Law School, ’92


Thank you for joining us! Can you share with us the story about what brought you into the Cannabis industry?

I was asked to invest in the first From The Earth facility in 2015. At the time, I decided not to initially invest but I stayed in touch with the owner, Kintu Patel and continued to keep tabs on his business operations. I was extremely impressed by what he accomplished in that he created a luxury location catering to a very high-end demographic, which was unlike anything I had ever seen in cannabis. It was exactly what I would have done had I opened a dispensary. Several months later, we were having a discussion wherein he said he wanted From The Earth to “blow up” and expand as quickly as possible to other locations and cannabis-related businesses. I knew that my experience in real estate, law, hospitality and finance would be a perfect fit for his expertise in operations and the emerging industry, so I proposed that we partner up and take on the world together. That’s what we did and here we are.

What is your main thesis for investing time and/or money into the Cannabis industry?

It is extremely unusual for an entire industry to emerge from nothing and almost immediately become a billion-dollar opportunity where there are very little established companies who stand in your way. Add the fact that the cannabis industry should grow from $7B to $100B over the next 10 years and you literally have the opportunity of several lifetimes in front of you. As a long-time developer, I saw the chance to create a portfolio of properties and businesses that could explode over the course of just a few years if we invested enough money on the front end to create a company or product that could remain useful for generations. So, we look for the same attributes that a real estate project might need: strong location, some level of defensibility from competition and reliance on value that will not erode over time.

In your view, what are the 3 best ways investors can play the Cannabis boom?

I would first focus on “picks and shovels.” Sales to the end user are fine for now, and may continue for some lucky retailers, but the companies who are creating B2B value that becomes a “must have” for others in the cannabis industry are the ones who are likely to survive.

Second, I would look for strong brands. The truth is that the most commonly-purchased products in cannabis are, or will be, commoditized in the near future. In that case, companies must rely on customer loyalty and brand awareness to rise above the mass of competitors. Thus, it is the brands who are communicating the strongest message and developing the closest bonds with their audience that will succeed.

Finally, I’d seek out defensible intellectual property. Research and development will be critical as the cannabis industry evolves and competition increases. Although trademarks and patents are currently unavailable for cannabis companies in the US, once those protections are permitted, you will see firms with strong technology and new ideas quickly dominate certain segments of this business. IP is a long-term play but, if you are patient, the benefits could be enormous.

What do you see as the top challenge facing Cannabis companies today?

Regulation. Regulation. Regulation. The patchwork of regulations that exist for local, regional and federal government have almost no relationship to one another in today’s climate. It is maddening to try to work through the byzantine web of ordinances that have been created by legislatures and staff at the various organizations that currently regulate cannabis. Many companies get so frustrated trying to simply understand how to legally obtain a license that they give up altogether. It is especially bad at the federal level where cannabis remains a Schedule 1 drug and, thus, eliminates our industry’s ability to use banks or even mainstream tax regulation.

It is particularly irritating to see the hoops being placed in front of us by government when you recognize what cannabis is now doing for society. As an industry, cannabis is providing hundreds of millions, if not billions, of dollars of tax revenue to government entities throughout the country, to say nothing of the massive contributions cannabis companies are making to philanthropic organizations and their own communities. Yet, the legal cannabis entrepreneurs, in many ways, are treated worse than criminals who are flouting the law. Until we start to see consistent, reasonable legislation, and an end to the federal ban on this tremendously valuable product, the cannabis industry will never reach its true potential.

Thank you for all these great insights!

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.

Authority Magazine

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Authority Magazine is devoted to sharing interesting feature interviews of people who are authorities in Business, Film, Sports and Tech.

Authority Magazine

Leadership Lessons from Authorities in Business, Film, Sports and Tech. Authority Mag is devoted primarily to sharing interesting feature interviews of people who are authorities in their industry. We use interviews to draw out stories that are both empowering and actionable.

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