After a few years ogling the cannabis industry from afar, famed entrepreneur Kevin Harrington has decided to get in on the action.
In June, the original “Shark” on ABC’s Shark Tank and creator of the infomercial brand As Seen on TV became a strategic advisor and brand ambassador to cannabis holding Cannapreneur Partners and its portfolio companies. Harrington, who is personally invested in the company, will help steer the business through the murky waters of the consumer packaged goods category. He will also be in charge of identifying potential investment targets, a talent he is famous for.
“Cannabis is a growing industry, it’s very exciting for an investor, for an entrepreneur like myself,” Harrington explained during a recent, exclusive conversation. “When I look at the whole industry, I see that cannabis is a problem-solving kind of product. And I’m in the business of solving problems, as you know.”
A Complex Space
Cannapreneur Partners has invested more than $80 million into diverse businesses within the cannabis industry. Some, like Nature’s Remedy (a retail store) are plant touching, while others, like GroIQ, never come near the plant. Instead, they provide an ancillary service to the industry.
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Harrington seemed equally excited about all verticals, from software to product innovation. Nonetheless, it’s tangible products that catch his eye the most.
“I speak for myself. Cannapreneur has a proven cannabis investment strategy, a philosophy… I’m focused on putting my time and effort into bringing new opportunities to Cannapreneur. So, I like physical products that can be sold, that can be demonstrated, that can be in stores. This is how I started close to 40 years ago: finding a product, producing some TV around it, putting it on television, helping build the brand, then put it in the retail stores.”
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On this matter, a new obstacle lies ahead. Many cannabis products cannot be sold through the retail channels Harrington is used to, such as Wal-Mart, Target, CVS, or Walgreens. Therefore, situating the merchandise requires understanding specialty retail around this category.
The Shark Bowl
Among the many exciting projects Harrington and Cannapreneur are working on, there’s one that goes back to the investor’s early days on ABC: the team will be hosting Shark Tank-manner events where cannabis companies can pitch their ideas.
This is where Harrington really plans to shine, taking his years of experience as a product-focused entrepreneur and applying it to the cannabis space.
“I’ve been involved in pretty much every industry, housewares, hardware, fitness, golf, fishing, toys, beauty, you know, I could keep going… So I think what this has given me is a tremendous relationship with manufacturers all over the world. Products need to be manufactured, they need to be engineered, prototyped… All of that is very important to be able to make a good quality product with very low returns and problems, and at the right price, so you can make margin and be profitable,” he explained.
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Proficiency and scale, he added, are key elements to commercial success – and his team can bring this to the table. He acknowledges, however, a cannabis counterpart who was familiar with industry-specific logistics challenges and regulations was needed. That’s where Cannapreneur, once again, comes in.
Bringing up a conversation I had with Harrington a couple years back, I asked about what he considers to be one of this strongest business abilities: finding customers.
Many of Harrington’s ventures relied on traditional media, TV, newspaper ads, infomercials, etc., to get their products in front of people. But cannabis cannot, for the most part, be advertised in the same way.
I wondered how he plans to work around these well-known limitations.
Thrilled with the question, he answered unhesitant. It was clear he’d already given this matter much thought.
“As we look at the cannabis space, there’s blacklisted products for Facebook and Instagram, etc. So we actually have now also invested in an ad network that is for blacklisted products,” he said. “This has been a big challenge for many companies.”
Kevin Harrington, Daymond John, Kevin O’Leary and Barbara Corcoran attend the „Summer Press Tour” … [+]
Fortunately, The Shark likes a good challenge.
When prompted about cannabis products being sold on As Seen on TV-style shows, the entrepreneur once again jumped at the query, explaining hemp products are already being sold that way.
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“I do believe that, at some point, more and more kinds of cannabis products will eventually find their way into mainstream media,” he voiced. “As we start doing some of these blacklisted exchanges and things like these, we’re going to be breaking some new ground and it may open the eyes of some of the others out there.
“As more states ‘recreationalize’ the laws, I believe the federal situation is going to change also. So I just think that it’s the people that get in on the ground floor now that are forming the relationships and the distribution networks. This is a chance for us to do some learning, and connecting, and planting a lot of seeds. And yes, we will also be building some businesses and making some money along the way.”