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
“There’s big opportunity to be the next Google of the cannabis industry,” said Carter Laren, co-founder of Gateway, a year-old Oakland accelerator focused on cannabis startups. Some Bay Area startups, such as San Francisco-based Octavia Wellness, are making it easier for seniors to access medical marijuana. The company operates much like Avon, but instead of selling cosmetics to their friends, Octavia’s representatives make a commission selling marijuana products.
by Marisa Kendall, Bay Area News Group
Full Article: Daily Democrat
Ben Larson left his job directing a startup accelerator in 2015 to launch Gateway, one of the first incubators for pot entrepreneurs. The program helps founders develop their business models, find mentors, and learn about raising capital. Since Gateway set up shop in Oakland, California, Larson has been flooded with “‘X’ of pot” pitches. But a catchy tagline isn’t enough. Let’s say you run a payment processor company for marijuana dispensaries. You nickname it the “Stripe of pot.” “You have got to be much, much more,” Larson says. “Because as soon as it becomes legal, after the stigma drops a little bit, what stops PayPal from coming in and kicking your arse?”
by Melia Robinson
Full Article: Business Insider
Over my career, I've helped build and deploy weapon systems, music videos, mainstream movies, pornography, firearms and sex toys. But when I co-founded Gateway, an accelerator for startups in the cannabis industry, many friends responded by saying, "I never thought you'd do a thing like that!" If, like my friends, you grew up during the Nancy Reagan "Just Say No" era, the idea that the marijuana industry could be a positive force in society may seem preposterous. It’s not preposterous at Gateway. Twice a year, 10 startups receive four months of mentorship and an investment of $30,000 in exchange for 5 percent. The startups range from payment-processing technology and genetics software to edible brands and distribution businesses.
by Carter Laren
Full Article: Recode
via Tech Open Air 2016
In episode 40 of Investing in Cannabis, Brandon David interviews Marshall Hayner, who is a founder participating in the Gateway Incubator program. Hayner, who hasn’t yet renamed his company, joined the inaugural class with a B2C platform but has pivoted to B2B. Hayner is trying to use a bitcoin payment system in the cannabis industry by hiding bitcoin from the user experience and creating a plug and play type of solution using blockchain technology.
by Alan Brochstein, CFA
Full Article: New Cannabis Ventures
Gateway Incubator is based out of Oakland California and invests roughly $30,000 each year in up to 10 cannabis startup companies. The startup companies admitted to the incubator will move to Oakland for 4 months while they receive mentoring and coaching from the team of industry leader experts who work with Gateway Incubator. Startup companies in the incubator will have a chance to present their companies to a panel of investors that have been carefully selected. powered by MANTISCLOSE Even after the program is complete, business owners of the startups that went through the incubator program at Gateway will become alumni of the program and have access to a large entrepreneurial network for continued guidance, increased knowledge exchange and ultimately further success.
Full Article: WeedReader
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
Ben Larson highlights a different challenge. For many aspiring cannabis entrepreneurs, there is a steep cultural learning curve. "Understand that this is a black-market turned social movement that is quickly transitioning to a capitalist-driven professional industry. In the past, you'd call the cops on your competitors, because of course you were breaking the law, but now there can't be any patience for petty back biting. The industry has to adopt similar traits as the tech industry, such as mentorship and paying it forward, or collaboration and competition." Cannabis startups are just startups, after all, and he wants the entrepreneurs Gateway works with to be indistinguishable from others.
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
Ben Larson, one of the founders of cannabis industry incubator Gateway in San Francisco, spoke at Valley in Berlin, a one day conference in Germany bringing together interesting Silicon Valley speakers with startups, founders, investors, mentors & politicians from around the world, on March 10th. Ben, who worked two years at The Founder Institute, helped launch over 20 startups by leading semesters in San Francisco and Silicon Valley in the four month program.
by Alan Brochstein, CFA
Full Article: New Cannabis Ventures
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
Available on YouTube
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