CFN Media recently sat down with FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) CEO Andriyko Herchak to discuss the company’s royalty investment model, its accomplishments to date, and its strategy going forward.
CFN: Thank you for your time today Mr. Herchak, and congratulations on your recent news. Before we discuss the news, please give us an overview of FinCanna Capital and its royalty model.
Andriyko Herchak: You are welcome, it’s a pleasure to speak with you today. At FinCanna Capital we are building a diversified portfolio of royalty based income by investing in top tier companies in the United States medical cannabis industry, with a focus on California. What is a royalty? Basically, we invest capital in a company and in exchange we receive a percentage of its revenue going forward. It has been a very successful model in other industries and we believe now is the perfect time for this royalty model in the US cannabis space and particularly in California. Our royalty model allows operators and business owners to preserve their ownership stake, not diluting themselves as they would with typical equity financing.
CFN: Why do you think the royalty model makes sense for cannabis companies today, particularly in the United States?
AH: In California right now, basically every company is a startup or running as a startup, many with no history of revenues. If those companies are trying to raise money, equity financing can be massively dilutive, in large part due to the lack of a track record of revenue production. Our model does not look back, but rather forward. Our investment approach allows companies to preserve equity while providing cash to grow their business.
Additionally, cannabis is still federally illegal, which is a major contributing factor for the shortage of capital for cannabis companies across the US. Banks and federally regulated Continue Reading