Howard Goodwin (Intrinsic Capital Partners)
On September 19, Howard Goodwin of Intrinsic Capital Partners, will speak at Kahner Global's 3rd Annual Cannabis Private Investment Summit in New York. This event gathers industry leaders and investors for a day of collaboration and networking
For the last 16 years, Dr. Goodwin has demonstrated a proven acumen investing in healthcare businesses at top investment firms including Maverick Capital, Citadel Investments, and, most recently, as a portfolio manager at Millennium Partners. Dr. Goodwin began his investment career at Graham Partners, a middle-market private equity firm. Prior to beginning his investment career, Dr. Goodwin received his medical degree from Thomas Jefferson University.
Can you tell us about Intrinsic Capital Partners?
Thank you. Yes at Intrinsic Capital Partners, we have assembled a team of experienced investment professionals and world-class operators who have worked together for years building multi-billion dollar businesses and brands in healthcare and consumer markets. Along with being a source of ongoing growth capital to businesses within the emerging cannabis market, our operating partners from leading healthcare institutions like J&J will provide companies with board-level guidance to help managers scale their businesses nationally.
How did your group get into the cannabis space?
We believe the medical cannabis space represents the most open ended market opportunity in the country. Within the healthcare industry, there is a long history of medicines derived from plants including such products as aspirin, the original statins, digoxin for arrhythmias, Taxol for ovarian cancer – the list goes on. Having spent a great deal of our careers in healthcare, we were drawn to the clinical merit of medical cannabis which we believe will help millions of people across multiple disease categories.
Can you elaborate on the clinical merit?
For example, the National Academy of Sciences recently noted, “there is substantial evidence that cannabis is an effective treatment for chronic pain in adults.” Chronic pain is only one of multiple diseases for which properly formulated medical cannabis could be a useful treatment option.
Please frame the market opportunity on the medical side.
Our estimate is that there are presently >60 million patients with qualifying conditions who presently live in medical legal states and are therefore eligible for medical cannabis. This translates to an addressable market opportunity of > $60 billion today. Some of the larger patient populations include chronic pain, inflammatory disease and cancer.
In what market segments of the medical cannabis space are you interested?
As mentioned previously, we will invest in and build brands around companies creating formulations to address specific disease categories. We will also invest in science and technology based companies with proprietary scalable business models that add value throughout the supply chain.
What are some specific examples?
For example, one area of focus for us is the lab testing segment. Lab testing represents a bottle neck within the industry as testing regulations are now being implemented in multiple states throughout the country. We believe that companies with a broad range of certified tests and fast turnaround on test results will be well positioned to address the need to test products throughout the country. Such companies have high return on invested capital metrics which translates to scalability. Related genomic companies provide testing down to the DNA level for given types of cannabis, facilitating better understanding for how to match up optimal cannabinoid profiles with desired outcome for the treatment of specific conditions.
Why is now the time to invest in the cannabis market?
At this point, we believe the cannabis industry is at a tipping point as 30 states plus D.C. have legalized medical cannabis and 12 other states have legislation in process. From a polling perspective, roughly 90% of the U.S. public supports the use of cannabis for medical purposes if recommended by a physician. Wall Street firms covering the space expect growth of 8-10x from $5 billion in legal sales today to roughly $40 - $50 billion over the next 10 years. Yet the amount of institutional capital available to help facilitate this growth remains low. We believe that applying proven investment and operating business practices to this exciting emerging market will translate to an unprecedented opportunity for value creation.
For additional information on the upcoming conference, please visit www.cannabrunch.net