How do you come to form the world's pioneer hedge fund investing in cannabis? As you might expect, it wasn't a straight path. The story of Poseidon is a personal one marked by struggle, hardship, and hard-won success. But as difficult as some of these events were to live through, they made us what we are today. We would never be as passionate about what we do without them.
Morgan and Emily Paxhia grew up in Youngstown, New York, a quiet town forty minutes north of Buffalo. The town is the final stop in the US before crossing into Canada, and it shares with the rest of that snowy region a long, hard winter, and a short, but exceedingly beautiful summer.
The eldest and youngest of three children, Emily and Morgan shared in the Paxhia family’s two central passions: sailing and entrepreneurship. Many of the Paxhia family traditions and milestones were celebrated sailing on their beloved Lake Ontario. At their father's knee, they learned the meaning of courage, self-reliance, the ability to gauge risk, and poise in the face of challenging circumstances--sailing skills they would later apply to every aspect of their lives.
They became experts at the craft, and before leaving high school were instructing others on the art and science of predicting the movements of unseen forces as sailing teachers. To this day, Emily and Morgan are sought after team sailors, and racing is a central part of their lives.
Tragedy struck the Paxhia family early on. When Emily was in high school and Morgan was just 12, they lost their father to cancer. Just five years later, their mother passed away, as well.
“We lost both of our parents to cancer very early in our life,” Emily says. “Watching anyone suffer from the effects of cancer and the egregious side-effects of the ‘treatments’ is like watching human torture. The ‘treatments’ actually ravage the body and make the person suffer even more.”
Having lived through the 1960s, and even briefly calling themselves hippies, Emily and Morgan's parents had tried cannabis in their younger years. When they started a family, they decided to stop--but they were still familiar with marijuana and the beneficial effects it has for those suffering.
“Our dad had really wanted to gain access to cannabis for nausea when he was sick,” Emily says, “but didn’t because of the stigma against it. We know cannabis would have helped him. That’s something that has made a permanent impact on us. Why should anyone not have access to a plant that can help to alleviate symptoms and suffering with very little side effects?”
The Journey Begins
Emily and Morgan’s parents were lifelong entrepreneurs—another tradition they passed to their children. They began soon out of college with a business renovating sports and antique automobiles.
The Paxhias took the positive cash flow from that business to fund a real estate venture. Over time, they amassed a collection of over 50 income producing properties around the Western New York region. Young Morgan lent a hand with this business, cleaning and painting the rental units. His own entrepreneurial journey would begin the same year their father passed away.
“That summer, I partnered up with a friend of mine in a landscaping venture,” Morgan says. “He lived in a nice community where we literally would go house to house to cut and clean up yards, flower beds, etc. One particular hot summer day we were tasked with de-stumping an oak tree with nothing more than a hose, a couple shovels and an ax. We worked 8 to 12 hour days all summer long. That was my first taste of doing our own thing and growing a business.
“That very year I started buying stocks, using some of my savings from the summer gig along with other funds I had saved. I used the Peter Lynch/Warren Buffett approach to investing, which was to buy recognizable names of businesses I could understand. After a summer of fueling lawn mowers, I focused initially on Exxon.”
He soon learned that he was a natural at sizing up successful investments. As he went to school and then began his career, he turned his passion into a profession. After training at trading desks for several large corporations, including UBS, Morgan became a financial adviser, at an independent firm in Rhode Island.
Not content to stay put, it wasn’t long before he began looking around for bigger opportunities. He wouldn't find one until he started speaking with his big sister in New York.
The Doctor is In
Emily's career path was a little less direct. Working in the publishing industry, and then as a consultant for financial institutions and media giants, she worked hard at finding how to help companies work better, more efficiently and to increase revenue exponentially.
As an Insight Strategist at Miner and Co. Studios in New York, she was an extremely busy “brand doctor”-- diagnosing where companies went wrong, and prescribing strategic moves to cure what ailed them, and most of all, increase the bottom line. The clients that sought her out included companies facing some of the largest sea changes in their respective industries at the time: American Express, Ralph Lauren, HBO, Comcast, Time Warner Cable, and many others.
"Working in corporations and for other small businesses was a great learning experience and there was much to be gained from that--but I always intuited that I would carve out a piece independently. I have always had an inclination to start something new. Our father was a business owner and an entrepreneur, and his spirit for tackling the challenges of running your own business really stayed with me."
At the same research consultancy in which Emily worked was another consultant looking for a new opportunity. Christopher Otchy was a former journalist with experience covering the 2004 Southeast Asian Tsunami in Thailand. He saw how developing nations rebuilt after natural disasters, and this lead to an interest in hemp. Seeing how it could be a strong and sustainable product that could not only be used as a building materials, but as a food, clothing, and revenue source for farmers in the more impoverished Northern sections of Thailand, he retained an interest long after returning to the US in 2007.
Speaking with Emily and Morgan, it was clear his skill with writing, marketing and design brought something fresh and unique to the table.
Discussions to start working in the cannabis sector began between these three players in 2011--but it wasn't until two years later, when all three were based in San Francisco, that talks and plans began to accelerate.
In 2013, when Colorado and Washington voted to make marijuana legal for adult use, something clicked.
"We knew it was a huge opportunity, and we knew it was time for us to make a stand," Chris says. “It was really just a matter of what angle to take in order to capture that opportunity. The hedge fund structure made the most sense as it was a vehicle that would leverage each of our strengths optimally--and allow us to deliver the very best value to investors."
"We knew that this industry was the right place to step out as entrepreneurs," Emily adds, "as we understood that any entrepreneurial endeavor would require passion and dedication. We are all very passionate about cannabis. Morgan was the one who noted the need for a fund like ours for investors seeking to place capital in the industry, but who didn't have time to do the necessary exhaustive due diligence to make confident decisions."
"It is rare that you have an opportunity to participate in a pivotal moment in business or society,” Morgan says, “but this is one of those times. Cannabis represents a new form of holistic healing as well as an opportunity for responsible use for adults seeking alternative ways to relax. Meanwhile, hemp can present an entirely renewed area of agriculture and industry. We see many opportunities to invest in and around cannabis that will mainly improve society, create jobs, and offer untold health benefits.”
In late 2013, Poseidon formed, and opened its doors for investors in January, 2014. The team has never looked back.
If you are interested in getting involved with Poseidon, either as a company looking for funding or an investor, please contact us now.