ROBERT HOBAN

Colombia 2021/22 | ECONOMY | VIP INTERVIEW

TBY talks to Robert Hoban, President of Gateway Proven Strategies (GPS), about finding the right partners, the evolution of the cannabis market, and international investment considerations.

What is your expertise in cannabis and what makes GPS an outstanding consultant within the space?

It has been about 14 years since I entered this industry. I am an attorney and became interested in the cannabis industry because my mother was diagnosed with pancreatic cancer. I looked into alternatives to traditional treatment and learned that medical cannabis would provide relief to her. Medical cannabis extended her life for nearly three years. I created the first law firm in the US focused on cannabis, and we are spread out across the country and have opened offices outside the US. On July 1, 2021, I sold my law firm, Hoban Law Group, toClark Hill, a top international law firm, and I have been leading its cannabis industry group since July 1. We have 102 lawyers dedicated to the industry of our 650 lawyers in total. In addition to teaching cannabis policy at the University of Denver and writing legislation for 35 countries regarding cannabis, many companies have approached me to run their businesses as a CEO. I have served as a term CEO on six occasions with my last two engagements being for multinationals building out their global cannabinoid divisions. As I was equally recognized as a lawyer and industry expert with global expertise, I founded—together with my partner Charles Feldman—GPS, a consulting firm that can build up companies from scratch. We can create a company, taking the fastest route from point A to B because we bring in industry experts who know us, have worked with us, and/or are our clients from all over the world. We have a flagship project in India and projects in Latin America, Europe, and the US. We also do M&A advisory and have a tool called Compass, a due diligence tool to help companies evaluate investments in the global cannabis industry. It is based on a proprietary 150-point algorithm. We know the space extremely well, and we know who to bring in for a project. We build a custom team for every GPS client, and using our reputation and measured success, we bring their objectives to life. That is why people call us in. Everyone in the industry wants to figure this out on their own; however, regardless of their intelligence, many are simply unfamiliar with the industry, and they make mistakes. We have made enough mistakes over the past 14 years, as have our clients, and we have learned the hard way. That is the reason why we have been successful—and, for most of our clients, we come from the future.

The three pillars that make GPS so valuable are its know-how, network, and experience. What company profiles would benefit from partnering with you?

We thrive on helping existing companies that operate in the space improve their operations, whether that is production efficiency, yield of cultivation, or efficiencies in extraction. Most importantly, we find access to markets. If you hold a license and operations in a particular country on a global scale, how do you sell that product without expertise and understanding of market, regulatory conditions, or players in all these markets? We help companies access the global market and scale their operations and businesses around the world, or at least outside their immediate geography. The basic profile is a company that is not within the cannabis industry, but is attracted to its potential. It needs reputable people to guide it through the process, which is why we called our company GPS. We will find a position for it and be its guide to this industry. One of our flagship projects is a large project in India run by wealthy families that operate pharmaceutical companies, and they had no knowledge of the landscape of the cannabis industry. They hired us to build out their executive team, select their genetics, teach farmers how to farm the plant, build greenhouses, build out extraction facilities, and build out their sales team and business development staff in real time. From front to back, we help build a turnkey operation in this space. That is what we do for companies outside the industry. This becomes more important when we look at companies like Procter and Gamble and others that produce consumer goods on a global scale. They have the wherewithal and experience but do not know the industry like we do. It has been said that in the cannabis industry, every year you work in it is a dog year—that is to say, seven years. Therefore, for my team and I to have been at it for so long is extraordinary. And if we combine that with our experience at Clark Hill law firm, which has an international office in Mexico and another in Dublin, with the ambition to scale beyond those locations, we are truly an excellent one-stop alternative for those keen to access the global cannabis marketplace.

How do you envision the cannabis market evolving in the mid to long term, and how can companies capitalize on the evolution?

We have to look at countries that are particularly successful in advancing not just legislation, but also regulations. Legislation says we will legalize this for these purposes, while regulation is where the distinct agencies, the ministries of health and agriculture, import/export and customs, and others get involved and implement specific rules to make matters work on a global scale. Colombia has perfected exports through its agencies that operate to the standards in place for phytosanitary requirements and the like. Recently, the laws were changed to allow the export of flowers in addition to seeds. These are areas like that where we begin to tie together. Let's look at the leadership at ANVISA, the nationalized healthcare system in Brazil, and how it is modifying its legislation to allow for consumer access. Then, consider the federally regulated commercial model in Germany, who imports large quantities of cannabis from places like Colombia. That is how you create an understanding of the global marketplace and utilize different countries for their strengths and weaknesses as they relate to the global international commerce perspective. As the healthcare systems in Latin America begin to access medicinal cannabis in a variety of forms, they will require biomass supplies and high level extraction capabilities. It is not difficult to look around the world and determine where companies have great operators, health and safety standards, and agencies that understand how to apply those standards to international commerce. That is what we will see more of. Increasingly, high-grade oils are exported from certain countries to markets like the US as an ingredient. We will see biomass in flowers of extremely high quality with specific profiles exported from countries such as Colombia and India into markets that have already created profiles and formulas for certain medical uses. These are exciting developments and is the future of this endeavor.

What is your final message for global investors and business leaders?

Investors should focus on two things. First of all, they should bear in mind that they cannot enter this business venture unassisted. It does not matter what successes they have had in similar industries or how much capital they have. One cannot succeed without learning from those who made enormous mistakes, even if they are a Procter and Gamble of the world. That is where industry expertise comes into play. I have aggregated many individuals with such experience in my law firm and at GPS capable of providing precisely that necessary guidance. The second thing is that it is essential to understand context. One cannot just look at the numbers and say they will sell this high-value THC material and generate sizable revenue. They need to understand the other players in the market, where they are active, which countries make it easier, which countries have tax incentives, and what access there is to the consumer. Most other industries have a trade organization that of international scope or comprehensive data going back decades upon which to make commercial forecasts. That is simply not the case in the commercial cannabis sector. This therefore demands collaboration and companies like GPS and law firms like Clark Hill provide that service.