Originally posted on Forbes
Giadha Aguirre DeCarcer saw the data powering big-money decisions to back private companies or consider public buyouts and wondered why there no one was doing the same for the legal cannabis industry.
The one-time investment banker and consultant began attending the sector’s budding event circuit, pitching a Bloomberg for cannabis data. Her Washington D.C.-based startup, New Frontier Financial, began to publish reports assessing regional opportunities, upcoming legislation and the impact of looming price changes. Lawmakers, cannabis entrepreneurs and, increasingly, mainstream investors started to buy in to DeCarcer’s data. “We’ve been right enough times to build a solid reputation,” DeCarcer says.
New Frontier doesn’t have the stigma of some well-meaning but hazier startups in the cannabis industry: its name is Wall Street corporate; its founder a no-nonsense numbers whiz with no interest in actually buying or selling the leaf directly. But it’s still an upstart compared to The ArcView Group, a five-year-old investor network and market research firm that’s helped investors pump more than $55 million into cannabis-related startups. In legal cannabis, Oakland-based ArcView’s reports have become the standard.
When ArcView CEO Troy Dayton met DeCarcer in November 2014, she was one of three-dozen cannabis-industry founders he was sitting down with each week. “I take all those meetings with a grain of salt,” he says. Then as much of the industry gathered in Denver for events themed around April 20 (the high holy day for cannabis enthusiasts), New Frontier correctly predicted that wholesale recreational cannabis prices were about to take a hit. The press noticed; so did ArcView investors. “I’ll admit when I first started seeing some of the stuff New Frontier was putting out, I thought to myself, if only I had more time and energy to devote to this. This is the kind of stuff I wish we were putting out,” says Dayton.
New Frontier and ArcView could have become locked on a collision course. Instead, they embraced the collaborative spirit of the cannabis industry. When ArcView publishes its fourth annual report later this year, it will do so as a formal partner with New Frontier, the research powered by New Frontier’s proprietary algorithms and prepared by its statisticians.
Combining New Frontier’s big data with ArcView’s qualitative research has both executives confident they’re creating a market leading report for the industry that should make it easier for investors to pour more money into the space. The research should also help politicians and industry groups continue the push to open up legal cannabis in more states in the U.S. “No one else will have our capabilities and reach,” says DeCarcer.
The partnership will allow each company to focus on its strengths without worrying about competing on the same data. For ArcView, that’s focusing on its industry events and network, matching startups with newcomer investors to the market, as well as working with a partner accelerator for cannabis startups, Canopy. New Frontier has another recent partnership in the medical marijuana space that could open up more medical data for it to study. The startup is also moving toward providing its data in closer to real-time, instead of the sometimes weekly or monthly data sets today (it should have daily widgets available to embed by January).
ArcView’s CEO Dayton says he hopes DeCarcer and her team’s success will also help the cannabis industry grow to have leaders of diverse backgrounds more indicative of the country than the white men in suits dominating other sectors.
Both ArcView and New Frontier’s executives say that the industry will have plenty of room for competition as the deal flow opens up. ”There will be entire floors of big investment banks in New York devoted to evaluating this space,” Dayton says.