BEN LARSON MET his co-founder Carter Laren in 2014 while they were both at Founder Institute, an entrepreneurship training program in Palo Alto that seeks to “globalize Silicon Valley.” Legalization caught both partners’ attention, but when they began their research, the companies they encountered were, Larson said, “far from the quality that you might see in the typical Silicon Valley pitch session.” They lacked professional polish and what he called an “understanding of what makes a viable business.” Gateway, the cannabis incubator the pair started in response, takes a 6 percent stake in early stage startups and, in exchange, gives them a months-long boot camp and a chance to pitch investors. Basing Gateway in Oakland was an easy call. “We see it as the capital of the cannabis industry,” Larson said.
Gateway received more than 100 applications for its first class, which began with seven companies this past spring. Gateway is housed in a bayside industrial building called Leviathan, whose façade evokes a ship and a sea monster in battle. Some of the walls are covered in copper-colored scales, like snakeskin.
When I visited in June, presentations to investors were still months away, but the founders were already honing their language and slide decks. Over a pizza lunch, they practiced their pitches for one another, a few guests, and a video camera. Laren paced the barren room like a stern grade school teacher, encouraging “candid, Simon Cowell–style feedback.”
Most of the Gateway companies had developed software aimed at professionalizing the outlaw industry. One startup, called Charge, wanted to simplify payment processing; since many banks won’t give cannabis companies accounts, they still often operate in cash. Another, Trellis, had developed compliance and inventory software for growers. Of the five founders who presented, two, Khari Stallworth and McKinley Owens, were black — roughly as many black entrepreneurs as I’d met in the previous year and a half covering cannabis from Denver.
Twenty-four-year-old Owens, dressed in a jean jacket, untucked shirt, and pointed leather boots, went first. He’s the CEO of Flora, a company he started with two friends from the University of Michigan. Flora plans to digitize and study the cannabis genetics data that underground growers have accumulated over the years. For now, growers use “20 years of intuition and maybe pen and paper if they’re super advanced,” Owens told the room. He quoted one grower: “‘If those notes got wet or caught fire, we’d be fucked.’”
Flora had attracted interest on Reddit, but like any tech startup, it faced thorny questions. One was how to convince growers — a generally self-protective group — to share their data, especially with, as Owens put it, “carpetbagging hipsters.”
When Stallworth’s turn came, he stood up and said, “My wife and I don’t know shit about cannabis. We know food.” He wore a sport coat over a Sriracha T-shirt, and a few days of stubble. After high school, Stallworth lived near Chicago with a roommate who was studying to be a chef. When they got high, they feasted on his roommate’s homework assignments — foie gras and crème brûlée — instead of chips and pizza.
Years later, after studying cooking and cinematography, he was living in Los Angeles working as a unit technician on Hollywood blockbusters when he met Sascha Simonsen, an expert baker from Denmark who catered movie shoots. On the set of Inception, Stallworth boasted, “Leonardo DiCaprio himself” requested her cookies. The pair married and now have two young children.
The edibles market is crowded, but the couple thought they could differentiate themselves with treats that masked the plant’s unappealing taste. “We knew we were on the edge of a problem we could solve,” Stallworth said. Early this decade, their company, Buddha Bakes, placed products in 75 dispensaries and had more orders than they could fill. But as they started having kids, they became worried about the risk of criminal prosecution and eventually scaled down and then shuttered the business. After Gateway invited them to join its first class, however, they decided to try again. They moved to Oakland and renamed their company Kamala.
Unlike Gateway’s software companies, Kamala, if it stays in Oakland, will have to get licensed by the city. Over the summer, Stallworth told me, he got into a tense exchange with Council member Brooks at a mixer for those interested in equity licenses. When Stallworth said that entrepreneurs with criminal backgrounds would struggle to raise venture capital and that the city should figure out ways to support them, Brooks accused him of, as he recalls, “trying to cut people out.” (Brooks has no memory of this exchange.) “I definitely recognize the injustices,” Stallworth said. “I am a black man.” But as a new arrival, Oakland is telling him to take his business’s jobs and tax dollars elsewhere. The city should “put something together that just makes sense for a business owner,” he said.
by Alex Halperin
Full Article: California Sunday Magazine
via Tech Open Air 2016
In episode 38 of Investing in Cannabis, Brandon David interviews Carter Laren and Ben Larson of Gateway Incubator and Sascha (CEO) and Khari Stallworth, the husband and wife team who run Buddha Bakeries and are part of Gateway’s first class that began two months ago in their Oakland headquarters. The sixteen-minute interview gives a remarkable two-sided perspective that helps explain the potential for accelerators to assist cannabusinesses wanting to scale their businesses.
by Alan Brochstein, CFA
Full Article: New Cannabis Ventures
This Silicon Valley–defying fact has held true as I’ve explored the new world of weed. As Ben Larson, cofounder of Oakland’s Gateway Incubator, told me, “We have this unique opportunity to create the industry as we see it — as we want to see it. We want diversity, we go get more diversity. Want more women founders in the space, we go create more women founders. There’s a lot of passion — that’s what makes it so intoxicating.”
by Sarah Browne
Full Article: The Bold Italic
Passion for the plant is a common denominator among the new groundswell of North American cannabis entrepreneurs, but that doesn't always translate into the ability to communicate a solid business plan to investors. Fortunately, business accelerators tailored toward cannabis entrepreneurs are stepping up to help fund, train and mentor startup companies that need the support of industry players with experience.
By Julia Wright
Full Article: Civilized. Cannabis Culture Elevated
As marijuana continues to move into the mainstream, dozens of Bay Area startups are banking on big business opportunities in the cannabis industry.
"We are at this precipice: There is a lot of money — real capital — that wants to come into the space," said Ben Larson, who runs Gateway Incubator, a cannabis startup incubator in downtown Oakland.
by Krystal Peak
Full Article: San Francisco Business Times
Let’s say you’ve just come up with that brilliant-but-practical cannabis idea that’s going to get you your share of the explosive new marijuana industry. Here’s the problem: perhaps you have insufficient business experience and you’re not exactly flush with cash.
The founders of Gateway Incubator in Oakland, California want to help you.
by Sean Quinn
Full Article: CannabisNow
On episode 24, we speak with Carter Laren and Ben Larson of Gateway, an early stage accelerator program for cannabis companies. Gateway is a full immersion business accelerator and seed investment program located in the birthplace of the cannabis industry. Tune in to hear about how Gateway is helping cannabis startups become legitimate businesses in a rapidly growing and changing industry. Enjoy!
by Brandon David
Original Post: Investing in Cannabis
Silicon Valley elites are promising to super-charge the multibillion-dollar legal cannabis industry in 2016, starting in places like the Leviathan Building in Jack London Square.
by David Downs
Full Article: 7x7: Cannabis Insider
Gateway will provide companies with $30,000 in return for six% equity, with once percent going to the mentors responsible for coaching the incubator companies, as well as office space, according to Oakland North. The paper reported that another incubator, CanopyBoulder in Colorado, gives businesses $20,000 in exchange for 9.5% equity.
Full Article: Marijuana Business Daily
Co-Founder, Ben Larson, says the idea is to provide workspace, management expertise, and access to tech entrepreneurs for those with the next greatest idea in the burgeoning cannabis industry.
by Mark Selig
Available on SoundCloud
Gateway aims to create a group of legal, scalable and investable cannabis businesses in the Bay Area by providing seed investment and mentorship. The incubator plans to accept ancillary businesses where marijuana isn’t touched—like those that produce cannabis grow lights—but also businesses that directly handle the plants, like dispensaries and ventures that develop extraction technologies.
by Nailah Morgan and Kyle Ludowitz
Full Article: Oakland North
Is the world ready for the biggest onslaught of cannabis innovation in history?
Ben Larson and Carter Laren Founded Gateway Incubator in Oakland, California to help early stage cannabis companies hit the ground running.
I was stoked to sit down in the #weedclubigloo with Gateway to discuss the launch of their incubator- enjoy!
by Evan Horowitz
Full Post: WeedClub