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Darren Gleeman is managing partner of MBO Ventures, the cannabis industry’s only investment bank dedicated to Employee Stock Ownership Plans. He answered eight simple questions for NY Cannabis Insider’s “People to know” series.
What is your position and what do you/your company do in the cannabis space?
Managing Partner of MBO Ventures. MBO Ventures is the cannabis industry’s only investment bank dedicated to Employee Stock Ownership Plans (ESOPs) which make the negative tax implications of 280E irrelevant. I’m proud to share that our firm earned distinction in 2023, with a patent pending for its groundbreaking ESOP methodology. This methodology played a pivotal role in executing the cannabis industry’s first three inaugural ESOPs.
How long have you worked in the cannabis space?
I started working in the cannabis space back in the summer of 2021.
What did you do before you were involved in the cannabis industry?
I’m an ESOP investment banker. If someone wants to sell their company, they come to us if they want to sell to their employees. We structure ESOPs in numerous industries now, and prior to my involvement in cannabis. Up until recently, very few were aware of ESOPs and what advantages they bring to this industry, especially with the burden of 280E. I’m excited to be bringing more light to the inner workings of ESOPs, their structure, and the benefits they offer to employees in helping them gain equity and ownership.
What led you to the cannabis industry?
I was chatting with a friend that is in the business of manufacturing equipment for the cannabis space. He asked if an ESOP was allowed in the Cannabis space. I said, “It is, but nobody would want to do an ESOP in this space – the valuations of these firms are way too high. You are talking about firms valued at 3 to 4 times revenue.” He then explained that the valuations were much lower, and he also explained 280E to me. At that point, I knew I needed to get involved in the industry.
Do you have any advice for someone looking to get into the NY weed industry?
If you are one of the first people in the market, you will do pretty good, regardless of your talent. The founders that know how to run a business will survive, and the ones that don’t, will fail. Hire a great operator to ensure your success, and surround yourself with a great team.
What do you think the NY cannabis ecosystem will look like in five years?
Illegal operators will be mostly gone which will allow NY operators to compete at a better level. The product will be of a higher quality, the budtenders will be better, and the distribution will become more efficient. Prices will still come down, and margins will be squeezed. The better operators will survive. More licenses will be awarded and there will be consolidation.
Do you use cannabis? If so, what’s your favorite method and why?
I do, and when I do, I’ll usually gravitate towards vape pens. I find them to be super quick and easy to use.
Who should contact you, and what’s the best method?
Business owners interested in learning more about ESOPs are welcome to contact me directly. My email address is dgleeman@mboventures.com. You can also learn more by visiting MBOVentures.com.