CULTIVATED: Canndescent lands new funding, social justice activists versus corporate cannabis, and more.
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Let's dive right in. The spate of vape-related illnesses continues, with Missouri announcing the eighth death in the US on Thursday. The FDA is also launching a criminal probe into the matter, alongside the CDC's investigation. We're keeping you up to date on those developments here.
In other news, the embattled cannabis producer CannTrust had its growing license suspended by Health Canada, which regulates cannabis. The company has seen its shares drop more than 70% since the beginning of this year.
The US House of Representatives is set to vote on the SAFE Banking Act next week, a bill that would allow cannabis businesses to access commercial banking services, as early as next week. The bill has faced opposition from civil rights and cannabis advocacy groups including the Drug Policy Alliance, who are calling on the vote to be delayed until social justice provisions are included.
I also went to the Cannabis Private Investment Summit at the law firm Duane Morris's midtown Manhattan offices on Tuesday where we saw some of the same issues at play, albeit on the state level.
New York State Sen. Liz Krueger outlined the social justice case for legalizing cannabis in New York - in a room full of high net worth investors and cannabis execs - and laid out how limiting the number of licenses one company can possess in the state is crucial to her stated social justice goals. She also said she wants to provide a structure that would allow small, minority-owned startups enough access to capital to get their businesses off the ground.
We also scored a sit down with David Feldman, who leads Duane Morris's booming cannabis practice, and ex-Canopy Growth CEO Bruce Linton at the conference.
While the cannabis legalization movement has the same broad goal - the legalization of cannabis - it's fraying into two sides: activists who want social justice considered above industry-friendly legislation, and the increasingly well-capitalized cannabis companies and investors on the other side. We'll be watching how this plays out.
As Feldman told me in his office overlooking Times Square this week, "legislation is all about compromise."
More stories from around the BI newsroom:
We got an exclusive look at the pitch deck the California cannabis company Canndescent used to raise $27.5 million as it muscles into new markets
The California cannabis company Canndescent has closed a $27.5 million Series C, led by Green Acre Capital. The funding round valued Canndescent at $200 million to $300 million, CEO Adrian Sedlin told me.
In an interview, Sedlin discussed the challenges of raising growth-stage capital in the cannabis industry.
We also got a hold of the deck Canndescent used to close a relatively large funding round in a tough environment for venture-backed plant-touching companies.
The New York State lawmaker who's leading the push to legalize marijuana just leveled a stark warning against vape makers
New York State Sen. Liz Krueger is spearheading the push to legalize marijuana in the state after her bill failed to earlier this year.
Krueger leveled a stark warning against THC vape manufacturers at an exclusive Manhattan conference for cannabis investors. She also outlined how social justice efforts are crucial to passing cannabis reform in New York state. It points to deepening conflict between legalization advocates and so-called 'corporate cannabis.'
The man who built Canopy Growth into the world's biggest cannabis grower before being ousted told us why he picked pet-food CBD and psychedelics for his next ventures
He'll be taking on new positions as the executive chairman of Gage Cannabis Co., a Michigan dispensary chain; as a special adviser at Better Choice Co., a CBD-pet-food supplier; and as a director at Mind Medicine, a company developing psychedelic-based drugs for FDA approval.
Business Insider caught up with Linton on the sidelines of the Cannabis Private Investment Summit in midtown Manhattan.
Capital raises, M&A activity, partnerships, and launches
- Multistate operator Cresco Labs is acquiring Tryke, a cannabis company operating in Nevada and Arizona, in a $282.5 million deal. Like competing MSOs, Cresco has been on a dealmaking tear as of late - we covered their $825 million purchase of Origin House in April.
- Cannabis fund Altitude Investment Management's European arm invested $5.5 million in KannaSwiss AG, a CBD isolate distributor in Europe.
- Toronto-based psychedelic firm Field Trip Ventures is opening what it calls the world's first legal cultivation and research facility for psilocybin. The facility, based at the University of the West Indies in Jamaica, will have a broad focus on the genetics, breeding, cultivation, and extraction of active compounds in 180-plus species of psilocybin-containing mushrooms.
- California cannabis testing lab Cannalysis raised $22.6 million Series A from CanLab, another cannabis testing lab. The company said it is bringing a new test for vaping additives to market, as the federal government continues its probe into vape-related illnesses.
- Front Range Biosciences, a tech company that supports the breeding and cultivation of cannabis, raised an $8.5 million insider round with participation from existing investors including Welcan Capital, AFI Capital, Phyto Partners, Salveo Capital, and others.
- Cannabis media company PRØHBTD Global is rebranding as Future State Brands and will oversee a brand of "lifestyle and wellness" CBD and THC brands. The rebrand is in conjunction with a new funding round, led by Texas cannabis fund Cresco Capital and a strategic partnership with the Madden Brothers.
- Canadian cannabis company TerrAscend has entered into a distribution agreement with vape company Syqe Medical to bring Syqe's metered-dose vape to the Canadian market.
- Shopify opened its online store platform to hemp and CBD merchants in 40 US states. Shopify VP Loren Padelford told me that CBD merchants can't use Shopify payments for purchases yet.
- Cannabis recruiting startup Vangst is launching a social equity hiring program aimed at helping thousands of people negatively impacted by the War on Drugs find jobs in the cannabis space.
- Trait Biosciences, a Toronto-based cannabinoid research firm, has formed a strategic advisory board with a number of seasoned executives. The board includes: Keith Levy, president of Mars Wrigley's Global Business Development where he led the multibillion-dollar investment in KIND Snacks, Pete Carr, president of Bacardi North America, Genève Stewart, VP of strategic sales at Coca-Cola.
- Former MedReleaf VP Ivan Latysh joins Canadian cannabis cultivator Flowr as CTO. Flowr also brought on Laurence Levi as chief strategy officer and Francesco Tallarico as legal counsel.
Chart of the week
No chart in this edition. We're saving a great one for a story on cannabis bankers we're putting out next week...
Stories from around the web
- Everybody here wants to be a cannabis farmer (Bloomberg)
- Cannabis use by young people may be tied to depression and anxiety, CAMH study finds (The Toronto Star)
- Investors' high wears off as cannabis funding slows, data shows (CrunchBase News)
- Tilray's dubious anniversary marks 90% stock decline (Bloomberg)
- What did Canopy Growth say to the White House about USDA hemp regs? (Cannabis Wire)
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