A Mindset Milestone

The Closing of The Mindset Venture Fund and a New High in AUM

I’m pleased to announce that Mindset Capital has completed a $10 million capital raise for the new Mindset Venture Fund. The goal of the fund is to invest primarily in low-dose hemp beverages. The Mindset Venture Fund has already made five investments with plans for more in the next 30-60 days.

In my year end Mindset Value Wellness Fund letter, I wrote the following:

Since October, I have been thunderstruck. And it all started with learning that 10% of liquor store sales in Minnesota were hemp-based THC drinks. I thought to myself, that can’t be right, annual alcohol sales are $260 billion a year. There is no way that data point is accurate.

Well, after months of research and due diligence, not only is it correct, but it is rapidly spreading to other states as well.

I think there is an opportunity to invest in hemp-based beverages and that the category could eventually generate more than $50 billion a year in annual revenue and could create more than $250 billion of market value.

What is incredibly remarkable is that it is all federally legal, and you can order these THC drinks online with credit cards and have them shipped directly to your home. Even more remarkable is that there is confusion around Federal hemp laws and the emergence of state-based rules around distribution that gives us a 12-month (maybe a bit longer) window to invest with few competitors and at very attractive valuations in companies growing at triple digit rates.

Beverages are some of the best investments of all time in the history of investing (See Monster Energy’s performance the last 30 years). And we have wasted no time in attacking the opportunity. The Mindset Value Fund and the Mindset Value Wellness Fund have already made three investments into leading private beverage companies. And we plan to do two more by the end of January.

We plan to have about 7-10% of our existing funds in these private beverage investments. Despite my enthusiasm, I do not think it is prudent to have more exposure than 10%. These companies are earlier in their life cycle and possess more risk than our more established investments with much greater revenue, cash flows and assets.

It is for that reason that Mindset Capital is launching a dedicated beverage venture fund in early February to invest in several brands and infrastructure plays around this thesis to go even bigger. And we have negotiated exclusive investment opportunities that will only be available to our new fund.

Beverages are yet another example of how much alpha there is in cannabis and how few investors are paying attention to the seismic changes happening in and around cannabis.

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I’m also pleased to announce that with this fresh capital raise, total assets under management for Mindset Capital now exceeds $50 million.

The future of cannabis and cannabis adoption is very bright and I think there is so much opportunity for anyone willing to do deep dive research and invest for the long-term. Combine this industry specific focus with a backdrop of dwindling fundamental investing and a lack of focus on anything that isn’t exciting or large and this is an exciting time to generate alpha.

I’m grateful for all of my investors’ support and its an honor managing their capital.