Hemp Marketplace Home›Forums›Scammers Hall of Shame›How to Spot a Unicorn …
Tagged: Hemp 101, scams, tips and tricks, unicorns
If you’ve been involved in the U.S. Hemp industry for more than a few months, you will have no doubt heard the term “Unicorn,” or as I lovingly refer to them as Polka-Dotted Unicorns (PDU’s).
As I mentioned in a previous article I penned in April of 2018 entitled Chasing CBD Hemp Unicorns (https://www.linkedin.com/pulse/chasing-cbd-hemp-unicorns-zev-paiss/), the hemp industry has a tendency towards chasing PDU in its effort to find the most amazing deal imaginable in this rapidly evolving industry.
The two critical issues needed to identify these beautiful and extremely illusive creatures are to 1. Understand the hemp industry and, 2. Know the people you are dealing with. These might sound incredibly obvious but, in all transparency, even someone such as my self has oft times been bamboozled by ignoring these simple guidelines.
Understanding the industry is an ongoing process and includes having a realistic sense of the scale of the industry and the trends driving that. At ground level, (pun intended) it is important to understand how much hemp is being grown, the primary states where it is growing, and the level of infrastructure needed to grow, dry, store and move hemp at very large scale.
For example, someone looking to purchase 1,000,000 (one million) pounds of shucked biomass should expect to see over 3,300 super sacks holding around 300 pounds each in any Proof of Life (POL) be it in a personal tour, a phone-made video, or a set of date stamped photos. Think football field. In the seven years I have been in this industry I have NEVER seen that much biomass in one place! That amount of material would need to be trucked in over thirty (30) full-sized 53-ft semis, each capable of carrying up to 30,000 (thirty thousand) pounds of biomass. This is not the kind of order one would just drive over, pick up, and haul it away in an afternoon. This require serious logistical expertise which is still rarely found in the hemp industry.
This is why when I get a call for a 10-20 million pound order, I have a tendency to thank them respectfully and then quickly back away from the phone. I am not say that none of these deals are real, only that it is far more the exception than the rule at this early stage of the industry.
If the scale of the deal feels realistic, you will then want get to know the people bringing them to you. As the wise books says, “trust but verify.” It may be that the person you are speaking with is actually not the buyer or even an agent of the buyer. It is far more likely that you will discover a veritable chain of actors all hoping to get their small (or not so small) payment as their reward for helping to make this sale happen. Try as quickly as possible to determine how many folks are between you and they final buyer.
Then take some time to get to know your contact. Ask about their explore background in the space, what are their primary expertise, and their motivations. It is very helpful to ask a few honest and pointed questions as part of that stage. This approach can quickly save you considerable time and effort in the long run.
Consider some simple questions such as:
• How do you know this buyer?
• How long have you been working together?
• How many deals have you completed?
• Have you seen this material with you own eyes?
After hearing their response you will have a much better idea how solid the deal is an whether it make sense to move forward. Don’t get me wrong deals are being made every day but the ones that are successful have pass the litmus test for at least these three very important aspects of building s strong and resilient hemp supply chain.
Let me know if you think I can be helpful. Please call 720-925-5161 if you want to speak.
Fantastic information here Zev. This is a must read for anyone and everyone in the hemp sphere!!! Thank you for this, it is vital to have the knowledge to stay safe in any and all deals,as well as establish and maintain trustworthy relationships.
Great info Zev!
Thanks for posting.