cannabis
Auto Added by WPeMatico
Meet Bespoke Financial, a lender for cannabis companies backed by Snoop Dogg’s Casa Verde Capital
Bespoke Financial wants to provide cannabis businesses with the same kind of financial services that other businesses get, but that dispensaries and growers can’t yet access.
The regulations around cannabis operations are so stringent at the local level — and so nebulous at the federal level — that national banks won’t give businesses in the cannabis industry the same basic services (like short-term loans).
That’s why one former Goldman Sachs banker has partnered with two entrepreneurs from the traditional agriculture industry to create Bespoke Financial. And it’s why the company has raised $7 million in financing led by Casa Verde Capital — the investment firm launched by legendary cannabis aficionado, Calvin Broadus (AKA Snoop Dogg).
In some ways, George Mancheril is the new face of the cannabis business. The former banker hails from Goldman Sachs and Guggenheim Partners and worked on the desks that dealt with alternative lending.
A transplant to Los Angeles roughly six years ago, Mancheril says he saw the migration of legally sanctioned cannabis begin for recreational use and knew there would be opportunities for new lending businesses.
“Cannabis will become a broad, mature industry just like any other, and if that is going to happen, there needs to be a debt structure that can support that,” Mancheril says.
The biggest impediment to the industry’s growth is the one that Bespoke Financial wants to tackle first — and that’s access to debt.
To build the company’s first product, Mancheril looked to his co-founder’s Pablo Borquez-Schwarzbeck and Benjamin Dusastre. Borquez-Schwarzbeck and Dusastre previously launched ProducePay, a fintech platform focused on produce farmers that has financed roughly $2 billion in perishable commodities throughout 13 countries. It’s backed by around $200 million in venture capital and debt financing.
What Mancheril and his co-founders have done is take ProducePay’s underwriting model and apply it to the cannabis industry. The financial instrument that they’re starting with is known “in the business” as factoring.
It’s basically advancing money to businesses for a contract that’s signed in exchange for a cut of the money once a company gets paid for the goods or services they’ve rendered.
“While the US legal cannabis market is forecasted to grow over 20% annually, reaching $23B by 2022, the industry’s true growth potential is limited by long cash flow cycles throughout the supply chain and a lack of scalable and efficient capital sources,” says Bespoke Financial co-founder and chief executive, George Mancheril, in a statement. “Our approach will dramatically improve cash flow cycles across the supply chain and provide scalable working capital to fuel our clients’ growth.”
The $7 million infusion from investors, including Casa Verde, Greenhouse Capital Partners and Outbound Ventures, will be used to build out the company’s business and establish its first credit lines with customers. Mancheril says it already has around $3 million worth of loans revolving through its business. Right now, the company is focused on California, but says it could expand to other regions that are embracing legalization.
“In general, in the cannabis industry overall, it’s difficult to access any part of the financial system,” says Karan Wadhera, a managing director at Casa Verde. “Now that we’re moving into a place where equity financing is getting expensive, a company like Bespoke plays an important and valuable role in the ecosystem to help young brands and mature brands get access to working capital when they need it the most.”
Powered by WPeMatico
Flowhub raises $23 million for its retail management software for cannabis dispensaries
As cannabis dispensaries flourish across the country alongside the push to legalize medicinal and recreational marijuana use, demand for tools to manage the specificities of the weed retail business continues to increase.
Looking to address that need, Flowhub, a cannabis retail management software vendor, has raised $23 million from a consortium of investors including e.ventures, Evolv Ventures (the Kraft Heinz-backed venture capital fund) and Poseidon.
The legal cannabis market is expected to top $66 billion over the next five years, according to estimates from Grand View Research, and entrepreneurs looking to get into the highly regulated industry are flocking to Flowhub’s suite of dispensary management services.
Not only does the company’s software address compliance concerns, according to chief executive officer Kyle Sherman, but it also integrates with companies like Dutchie for online ordering to facilitate in-store purchases and adds integrations with LeafBuyer and Leafly to provide more information to potential retailers.
The company also updated its software to include the “Stash” app, a mobile inventory management system, and a cashier app that integrates with iPads or other tablets to improve point-of-sale capabilities.
“What we are experiencing right now is an end to cannabis prohibition and Flowhub is on the front lines of this movement,” said Sherman, in a statement. “Every legal transaction completed with the Flowhub retail platform is a positive step forward, and we are committed to helping our customers build thriving cannabis businesses. With this investment, we will continue to automate the cannabis supply chain, retail and reporting processes and bring to market technology solutions that are not only shaping the cannabis retail business, but also driving forward the future of legalization and de-stigmatization.”
For investors like Emily Paxhia, a managing director at Poseidon, the opportunity to back a company helping to automate compliance in the regulated marijuana industry was too tempting to pass up.
“The compliance and regulation aspects make this a unique industry and Flowhub is one of the leading cannabis tech companies that is taking a meticulous and strategic approach,” Paxhia said in a statement. “We saw the potential for Flowhub’s technology and mission early on and we’re thrilled to continue to support them in delivering the cannabis retail experience of the future.”
Powered by WPeMatico
Looking for a job selling weed? EpicHint pitches training for cannabis dispensary ‘budtenders’
Adriana Herrera first came up with the idea for EpicHint, a training and staffing service for cannabis dispensaries, while she was surfing off the coast of Oaxaca, Mexico.
Decompressing after the dissolution of her last startup venture — her second attempt at running her own business — Herrera realized quickly that surfing and #vanlife wasn’t her ultimate calling.
The serial entrepreneur had previously founded FashioningChange, a recommendation engine for sustainable shopping, back in 2011. The company was gaining traction and had some initial support, but it ran into the buzzsaw of Amazon’s product development group, which Herrera claims copied their platform to build a competing product.
Undeterred, Herrera took some of the tools that FashioningChange had developed and morphed them into a business focused on online marketing to shoppers at the point of sale — helping sites like Cooking.com pitch products to people based on what their browsing history revealed about their intent.
By 2017, that business had also run into problems, and Herrera had to shut down the company. She sold her stuff and had headed down to Oaxaca, but kept thinking about the emergent cannabis industry that was taking off back in the U.S.
Herrera had a friend who’d been diagnosed with colon cancer and was taking medicinal marijuana to address side effects from the operation that removed his colon.
“When recovering from the removal of his colon, he’d run out of his homegrown medicine and go to dispensaries where he got the worst service,” Herrera wrote in an email. “He would ask for something for pain, nausea and sleep, and was always recommended the most expensive product or a product that was being promoted. He never got what he needed and had to self advocate for the right product while barely being able to stand.”
Herrera buckled down and did research throughout the course of 2018. She hit up pharmacies first as a customer, asking different “budtenders” for information about the product they were selling. Their answers were… underwhelming, according to Herrera. The next step was to talk to dispensary managers and research the weed industry.
By her own calculations, cannabis companies (including dispensaries and growers) will add roughly 300,000 jobs — most of them starting out at near-minimum-wage salaries of $16 per hour. Meanwhile, current training programs cost between $250 and $7,000.
That disconnect led Herrera to hit on her current business model — selling an annual subscription software for brands and dispensaries that would offer a training program for would-be job applicants. The training would give dispensaries a leg up for experienced hires, increasing sales and ideally reducing turnover that costs the industry as much as $438 million.
“The data is showing an average of a 30% turnover rate in 21 months,” says Herrera. “Looking at turnover and a lot of that comes down to bad hiring.”
The company is on its first eight customers, but counts one undisclosed, large, multi-state dispensary along with a few mom and pop shops.
Herrera also says that the service can reduce bias in hiring. Because dispensaries only hire candidates after they’ve completed the program, any unconscious bias won’t creep into the hiring process, she says.
Applicants interested in a dispensary can enroll in the dispensary “university” and once they complete the curriculum go through a standardized form to apply for the job.
“Our recommendation to run and get the best results is to pre-train, pre-screen and have the graduates unlock the ability to apply.”
Powered by WPeMatico
The budding industry of cannabis tech
Brian Kateman is president and co-founder of the Reducetarian Foundation.
More posts by this contributor
From food and drink to health and wellness and beyond, there’s one plant we can’t seem to get enough of: cannabis. It seems like every consumer product nowadays is taking part in reefer madness.
Home cooks are taking edibles to new heights. In places like Denver and California, you can take cooking classes specifically centered around food made with Mary Jane. The editors of Vice’s “Munchies” even put out a cookbook last year called Bong Appétit: Mastering the Art of Cooking with Weed. And it’s only one of many.
But marijuana culture today isn’t all based around the stuff you (er, people you know) smoked in college. Cannabis, long known for its medicinal and therapeutic purposes, is a hot commodity in food tech and other consumer products nowadays. Far more than just a way to get high, cannabis in its various forms has been used medically throughout history and in modern times as a treatment for pain and nausea, and has been found anecdotally or in limited studies to treat glaucoma, epilepsy and anxiety, among other conditions and symptoms. Businesses have caught on, and not a moment too soon.
The food products that utilize marijuana are a far cry from the old classic pot brownies (not that there’s anything wrong with those!). Thanks to modern science, producers are able to separate the two main chemical compounds found in marijuana: THC and CBD. THC has therapeutic benefits, but it’s best known as the part of weed that gets you high. This is because it’s a psychoactive compound. CBD, on the other hand, is not psychoactive — it can (supposedly) provide many of the anti-anxiety, analgesic benefits of the plant without producing a high. For obvious reasons, this gives marijuana a new appeal. It’s now possible to reap the benefits of the plant without experiencing intoxication, so you can lessen anxiety or pain while still functioning normally.
It’s worth noting at this point that many of the health benefits of CBD and cannabis in general are not scientifically proven in statistically significant, peer-reviewed studies. This is for a number of reasons, most significantly that marijuana is still a Schedule 1 controlled substance under federal law in the U.S., making legality an issue in its study.
Clearly, the lack of scientific evidence isn’t diminishing anyone’s desire for herbal refreshment.
But what CBD and other cannabis products lack in evidence, they make up for with enthusiasm. Companies and consumers alike are eager to try CBD in various products, from food to oils to skincare, in hopes of treating anxiety, sleeplessness and other woes. If you live in a place where CBD products are legal, you’ve probably seen them everywhere. Newsweek reported that CBD sales are estimated to grow 40-fold in the next four years, reaching a value of $23 billion. The big business of marijuana and CBD — California-based Arena Pharmaceuticals is the biggest publicly traded cannabis company in the world — is only growing.
You can already find CBD candies and oils at major national retail chains like CVS and Walgreens, and in states and municipalities where it’s legal, green connoisseurs can order CBD-infused lattes and cocktails. Even retailers like Sephora, Neiman Marcus and Barneys are selling curated displays of CBD-infused beauty and skincare products. The aforementioned Newsweek article reports that big names like Coca-Cola and Molson Coors Brewing are among the hordes of companies already working on their own CBD products. Clearly, the lack of scientific evidence isn’t diminishing anyone’s desire for herbal refreshment.
Except for the FDA, that is. The legality of marijuana and CBD is a confusing and often contradictory topic, and a hard one to keep track of because it’s changing all the time at the federal, state and municipal levels. But what can be ascertained is that because so much of the CBD industry is operating outside of any kind of government oversight, legally or otherwise, the quality of products can vary widely. This is something about which the FDA and independent doctors and pharmaceutical experts have raised concerns. Apart from companies making unfounded claims about the effects of their products, the actual ingredient makeup may be inconsistent, with some products containing less CBD than their labels claim. Little regulation and nascent standards of quality mean consumers might not always know what they’re getting.
But given the broad interest in CBD, that’s unlikely to remain the case forever. The FDA may have started cracking down on extralegal CBD product sales, but in the grand scheme of things, that only means that the agency recognizes the significance of the compound. CBD probably isn’t going away anytime soon, and among the food, drug, health and cosmetic industries, the race to do it best and biggest has already begun.
Powered by WPeMatico
These brothers just raised $15 million for their startup, Dutchie, a kind of Shopify for cannabis dispensaries
Ross Lipson comes from an entrepreneurial family, so perhaps it’s no wonder that as a college student, he dropped out of school to jump into the online food space, including co-founding, then selling, one of Canada’s first online food ordering service startups.
It’s even less surprising that having gone through that experience, Lipson would use what he learned in the service of another startup: Dutchie, a two-year-old, 36-person, Bend, Ore.-based startup whose software is used by a growing number of cannabis dispensaries that pay the startup a monthly subscription fee to create and maintain their websites, as well as to accept orders and track what needs to be ready for pickup.
The decision is looking like a smart one right now. Dutchie says it’s now being used by 450 dispensaries across 18 states and that it’s seeing $140 million in gross merchandise volume. The company also just locked down $15 million in Series A funding led by Gron Ventures, a new cannabis-focused venture fund with at least $117 million to invest. Other participants in the round include earlier backers Casa Verde Capital, Thirty Five Ventures (founded by NBA star Kevin Durant and sports agent Rich Kleiman), Sinai Ventures and individual investors, including Shutterstock founder and CEO Jon Oringer.
Altogether, Dutchie (named after the song), has now raised $18 million. We talked earlier today with Lipson about the company, its challenges and working with his big brother Zach, himself a serial entrepreneur who co-founded Dutchie and today serves as its chief product officer while Ross serves as CEO.
TC: It’s so interesting when siblings team up. Did you always get along with your brother?
RL: We complement each other strongly. I’m energy, I’m sales and business development. I’m fast-moving by nature and the guy who wants to drive the car as fast as possible. Zach is the one who wants to make sure that we’re doing everything right. He’s the methodical one. We really do understand each other quite well and appreciate each other’s strengths and weaknesses, which enables us to meet in the middle on a lot of things.
TC: It’s also interesting that you’ve both been founders beginning around the time you were in college. Were your parents entrepreneurs?
RL: Our father is a founder and has run his own business for the last 35 years. Our parents also always pitched us that anything is possible and encouraged us to go for it. He was the dreamer and our mom was the cheerleader, which is a pretty nice combination.
TC: You started Dutchie a couple of years ago. Is running this startup more or less challenging than your experience in the food delivery business?
RL: It’s our second year in business, and we’ve seen some explosive, unprecedented growth. As for whether it’s harder or easier than food, we’re very product and user-centric, and by that we mean consumers but also dispensaries. We’re focused on the customer all day, every day, with a team that ensures that they have support, that they receive their orders, that the orders are out the door quickly or at least, ready for pickup. We make sure the photos work, that different potencies are marked. Our system is kind of like a Shopify of the cannabis space maybe meets DoorDash.
TC: You don’t deliver, though.
RL: No. We don’t do delivery for legal reasons; the dispensaries [handle this piece].
TC: You’re charging like other software-as-service businesses. Do you also take a cut of each sale?
RL: We don’t charge on transaction volume.
TC: You’re working with 450 dispensaries. Is there any way to know what percentage of the overall market that is, and how much is left for you to chase after?
RL: First, there are more than 30 states where cannabis is either medically legal or that have legalized the recreational use of marijuana and we operate in both types of markets. It’s hard to know the actual count [of dispensaries], because they are always being formed, getting acquired or going out of business, but counting registered dispensaries, we work with more than 15% of them right now.
TC: Who are your biggest competitors? Eaze? Leafly? They also help consumers find cannabis and, in Eaze’s case, deliver it, too.
RL: Eaze is more focused on delivery where we’re more focused on pickup. It’s also only available in California and Oregon, whereas we’re in 18 states. They educate the consumer about online ordering, which is great, but they also own the consumer experience, where we’re really powering the dispensary.
Leafly and Weedmaps are really different types of platforms; they’re mostly known for their dispensary and strain reviews, where we’re strictly an online ordering service.
TC: You’ve raised a big Series A for a company in the cannabis space. Do you have concerns about there being later-stage funding available when you need it?
RL: It’s true the most investors still haven’t touched cannabis, though you are seeing bigger deals. Thrive Capital led that [$35 million] round in [the online cannabis inventory and ordering platform] LeafLink [last month]. You saw Tiger Global [lead a $17 million round ] in [the software platform for cannabis dispensaries] Green Bits last summer. It’s a big advantage to the funds that can right now invest because there are these barriers to entry; they’re finding deals that are promising and they can get in early and without competition.
Pictured, left to right, above: Ross and Zach Lipson
Powered by WPeMatico
Y Combinator bets on a startup building a weed breathalyzer for cops
Y Combinator has kept an eye on cannabis startups over the years, but it’s their latest investment that’s sure to attract the attention of both marijuana users and law enforcement.
SannTek Labs, which is launching with new funding out of Y Combinator’s latest jumbo class of startups, is building a new kind of breathalyzer that can detect blood-alcohol levels but can also determine how much cannabis a person has smoked or otherwise consumed in the past 3-4 hours.
CEO Noah Debrincat say that he wants the startup’s SannTek 315 breath testing device to help officers make stronger “evidence-based decisions” rather than only relying on unsophisticated roadside sobriety tests or blood tests, which can potentially take months to get results for and can lead to false positives by detecting cannabis use that took place several days prior to the test.
The SannTek breathalyzer detects the cannabis molecules in your breath, and gives a police officer a readout that lets them know if you have the drug in your system.
“We are specifically detecting Delta-9 THC, which is the predominant psychoactive component of cannabis,” Debrincat tells TechCrunch. “We understand how that gets into your breath. We understand what it does to you and the impairing side effects. And we know that if people are driving with high concentrations of that in their system, their psycho-motor skills are seriously decreased.”
A young startup building a device that could lead to people being arrested is obviously a pretty high-stakes situation, but Debrincat says they are confident in the tech and there are certifications that they’ll need in order to get the device into law enforcement hands. “The only way that a police officer will buy this is if NHTSA, the National Highway Transportation Safety Association, puts its stamp of approval on it,” Debrincat says, noting that SannTek is already in talks with the agency.
If it’s adopted, the startup’s device will be able to be used pre-arrest to give the officer a number indication of a driver’s impairment, or as SannTek further hones their device, the breathalyzer could be used for post-arrest evidentiary testing back at the precinct in a more controlled environment.
A Canadian startup building a device for U.S. law enforcement isn’t the most popular position, given many of the conversations around systemic discriminatory practices that result in higher police presence in communities of color. But Debrincat hopes that the company’s device can be part of a positive shift due to the greater objectivity it promotes and its tighter window of detection.
“The state of affairs currently is that there’s a bunch of misdemeanor charges for small weed crimes that are happening across America and one way to address that is by federally decriminalizing the drug, sure,” Debrincat says. “But what gives police officers power now is the ability to make a call because there is no [breathalyzer] device.”
There are reasons to be concerned for law enforcement getting a tool that could be used discriminately, but Debrincat says there is also plenty of reason to be concerned for the other drivers that are on the road while cannabis users might be driving impaired. The CEO tells me that drivers are 2x as likely to get into an accident while operating vehicles under the influence of cannabis. Other studies reinforce the risks of driving while high.
The company wants to keep the price of their device low enough that precincts across the U.S. can easily afford them; right now Debrincat says the startup is shooting for the $800-$1,000 range to stay competitive with other options out there.
Powered by WPeMatico
The ‘Costco of cannabis’ raises $2.8 million for a membership weed delivery service
Weed may be legal in California, but the black market is still the top spot for buyers looking for bud on a budget.
Flower Co. graduated from Y Combinator’s latest class on the promise that they could cut customers better deals by focusing on partnering with growers directly to create their own house brands while pushing users to order ahead of time. The company calls itself the “Costco of cannabis.”
The company just announced the close of a $2.8 million seed round from investors including Slome Capital, Prehype, Rob Stavis, Adam Draper, Josh Abramson and Camille Hyde.
Even in California where weed has been legalized, the black market is still king due to the high prices buoyed by high taxes. Flower Co.’s CEO Ted Lichtenberger says the regulated market is just 1/4 the size of the unregulated market. Flower Co.’s ultimate goal is less focused on getting people to ditch their existing dispensary as much as they are focused on getting black market regulars to go legit thanks to the better deals and conveniences of their platform.
Part of building allegiance to the Flower Co. brand is the company’s membership plan. Anybody can make a purchase on the site, but members save up to 40% on purchases, a number that makes a big difference when you’re buying weed by the ounce. An ounce of “Forbidden Fruit” goes for $192 without a membership and $142 with one, for example. With a membership, the company’s “House Sativa” goes for $63 an ounce.
An annual membership to Flower Co. is $119, and in addition to the discounts, users get faster delivery and beta access to the company’s “private events and concert series.” The company just recently launched a two-day delivery service for customers in Sacramento.
The company is just flexing its muscles in a few markets in California, but is hoping that by scaling slowly they can be ready to attack new opportunities as the regulatory environment shifts.
“We understand that we’re in the first inning of what’s probably a pretty long game, because this industry, as it goes federally legalized is going to have another massive transition moment just like it’s having right now as it’s getting legalized and regulated in California,” Lichtenberger says. “So if we have a great understanding of our customers and stay focused on keeping them delighted, and then be nimble in the face of that change, then we can come out as the dominant player in the delivery market.”
Powered by WPeMatico
Cannabis banking reform is smart, necessary and politically viable
Aaron Smith
Contributor
Contributor
Aaron Smith is co-founder and executive director of the National Cannabis Industry Association (NCIA).
Pressure is steadily mounting on U.S. lawmakers to implement comprehensive cannabis banking reform at the federal level, and that pressure is coming from all directions.
Rapid shifts in public opinion and a rising number of states with legal medical and adult-use cannabis sales have laid bare an obvious need to update our banking laws to meet the age of regulated cannabis markets. And earlier this month, Congress tackled the issue head on in a widely anticipated hearing that had huge implications for the future of banking for America’s legal cannabis industry.
The Secure and Fair Enforcement (SAFE) Banking Act was among the most notable topics discussed during the House Financial Services Committee hearing February 13, which was titled “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.”
The legislation, which would provide safe harbor to banks working with state-legal cannabis businesses, counts a large and diverse group of lawmakers, regulators, law enforcement professionals, financial institutions, businesses interests and trade organizations among its supporters.
House Financial Services Committee member Rep. Ed Perlmutter (D-CO), along with Rep. Denny Heck (D-WA), introduced the SAFE Banking Act in the last Congress, with 95 co-sponsors — including 13 Republicans — signing on. Twenty bipartisan co-sponsors signed onto the companion bill, introduced in the Senate by Jeff Merkley (D-OR). The two bills drew some heavyweight co-sponsors from both sides of the aisle, including Sen. Rand Paul (R-KY), Sen. Elizabeth Warren (D-MA), Sen. Cory Gardner (R-CO), Sen. Kamala Harris (D-CA) and Sen. Cory Booker (D-NJ), and in the House, Rep. Beto O’Rourke (D-TX), Rep. David Joyce (R-OH), Rep. Tulsi Gabbard (D-HI) and Rep. Adam Schiff (D-CA).
And a bipartisan group of 19 state attorneys general came together last year to urge Congress to advance legislation that would allow state-legal cannabis businesses to utilize traditional banking services available to every other legal industry in the United States.
Groups like the Credit Union National Association, the Independent Community of Bankers of America, American Bankers Association and the National Cannabis Industry Association are also vocal advocates for the measure.
As the U.S. cannabis industry continues along its steady growth trajectory, access to banking services is perhaps the most critical challenge facing operators.
And that wasn’t the first attempt in the House to address the cannabis banking problem. In 2014, House lawmakers passed an amendment to an appropriations bill (228-195) that, much like the SAFE Banking Act, would have extended legal protections to financial institutions working with state-regulated cannabis businesses. The measure failed to move through the Senate, however.
But much has changed since 2014. Ten states and Washington, DC, have now legalized cannabis for adult use; 33 states have legalized comprehensive medical cannabis programs; two in three Americans now support legalizing cannabis nationwide for recreational use, according to Gallup polling data; and a majority of older Americans — a formidable voting bloc — now supports legalization. Momentum around cannabis reform is spreading across the globe as well, with cannabis now legally available to adults for recreational use in both Canada and Uruguay, and numerous countries mulling similar reforms.
A brand new multi-billion-dollar industry has risen up in a few short years, and yet, most financial institutions in the U.S. remain reluctant to work with cannabis businesses due to fears of violating federal money laundering laws. That fear has forced the majority of cannabis businesses to operate on a cash-only basis — creating massive security risks, logistical nightmares and regulatory headaches for all parties involved.
As the U.S. cannabis industry continues along its steady growth trajectory, access to banking services is perhaps the most critical challenge facing operators. The recent House Financial Services Subcommittee hearing represents the committee’s first-ever hearing on this issue — a promising first step toward passing the SAFE Banking Act.
Sixty-seven percent of Americans across the political spectrum want Congress to enact legislation allowing financial institutions to do business with legal cannabis operators, according to polling data from think tank Third Way.
With this new Congress, there may finally be progress. Rep. Perlmutter and Rep. Heck plan to re-introduce the SAFE Banking Act in the House, and Sen. Merkley is expected to re-introduce a similar measure in the Senate. Now we need House lawmakers to prioritize this issue and move these measures through the legislature, so they can become the law of the land.
Powered by WPeMatico
Cannabis startup Caliva raises $75M from former Yahoo CEO Carol Bartz and Joe Montana
San Jose cannabis company Caliva is proving that weed’s still hot, even as some markets cool off.
The company is announcing a $75 million round of investment that includes participation from former Yahoo CEO Carol Bartz and football legend Joe Montana . If that pair seems unlikely, it just goes to show that cannabis attracts an eclectic mix.
With what the company itself refers to as a “war chest,” Caliva intends to expand its portfolio of products as well as ramping up its efforts courting cannabis users in California through a combination of branded brick and mortar stores, direct to consumer sales and sales to distributors. While state regulations slowed the overall market over the last year, Caliva grew its revenues by 350 percent, growing its company to 440 workers.
A general partner at Liquid 2 Ventures, Montana isn’t new to cannabis investing. In 2017, the former quarterback participated in a seed round for Herb, a cannabis-focused media company. Given the extreme toll pro sports take on the human body, it’s not uncommon for former athletes to get involved in the cannabis business, particularly with CBD products.
“As an investor and supporter, it is my opinion that Caliva’s strong management team will successfully develop and bring to market quality health and wellness products that can provide relief to many people and can make a serious impact on opioid use or addiction,” Montana said of his interest in the cannabis industry.
Caliva currently operates a popular retail location situated conveniently for Silicon Valley’s droves of weed acolytes, but the company is more than just a well-liked dispensary. Beyond just carrying popular brands, Caliva sells its own products at its own stores — everything from vape pen oil cartridges to pre-rolls — in addition to operating a distribution center nearby.
“I know great opportunities when I see them,” said Bartz, who will also join the company’s board.
Powered by WPeMatico
Media startup Prøhbtd raises $8M to help bring cannabis to the mainstream
Prøhbtd, a startup that CEO Drake Sutton-Shearer said is designed to “build a bridge” between the cannabis industry and mainstream culture, is announcing that it has raised $8 million in Series A funding.
It’s not the only cannabis-focused digital media company out there; I wrote about the initial funding for Herb last year. But Sutton-Shearer argued that Prøhbtd is creating premium content with a unique voice.
For one thing, he said Prøhbtd’s isn’t focused exclusively on cannabis. Instead, the goal is to create a diverse slate of lifestyle- and culture-related content, with cannabis as the hook.
Take, for example, Edibles, a video series hosted by Birdie Harrelson (niece of Woody Harrelson) — the series includes recipes for creating cannabis-infused baked goods, but as Sutton-Shearer put it, when each episode opens, “She’s not talking about weed, she’s going to bakeries.”
The company says that its video content (which is available on both the Prøhbtd website and on devices like Apple TV and Roku) saw 21 million views in May, with an average view time of 3 minutes and 45 seconds.
Sutton-Shearer said one of his priorities is forging “mainstream partnerships” like Prøhbtd’s deal with Advertising Week. The company also works with more than 60 cannabis brands — not just on branded videos and sponsorships, but more broadly on product development, design and marketing.
Asked whether this creates a potential conflict with the editorial side of the business, Sutton-Shearer pointed out that plenty of other digital media companies (like BuzzFeed and Vice) run their own branded content studios.
“Today’s younger consumer, I don’t think they really care that much whether something’s branded or not,” he said. “They do want to know if it’s entertaining and thoughtful.”
Prøhbtd had previously raised $4 million in seed funding from investors including actor/musician Donald Glover. The new round was led by Serruya Private Equity, The Delavaco Group and Cresco Capital.
“We’ve seen every media opportunity in the cannabis industry but none of them compare to what the team at PRØHBTD has built,” said Serruya Private Equity’s Aaron Serruya in the funding announcement. “We expect great things from the company and we’re excited to support the team’s global vision.”
Speaking of that vision, Sutton-Shearer said Prøhbtd is exploring international opportunities, including in Canada, Australia and Latin America, with plans for a Canadian public offering.
“We’re very strategically looking at the rest of the world, but there’s still a lot to be done in the U.S.,” Sutton-Shearer said.
Powered by WPeMatico