CULTIVATED: 7 cannabis stocks to bet on for a Biden win — Fyllo's $26 million pitch deck — Canopy CEO says he's bullish
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Jeremy Berke
Aug 15, 2020, 03:25 IST
A marijuana plant.Crystal Cox/Business Insider
Welcome to Cultivated, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.
It was a busy few days on the cannabis front. A slew of US and Canadian cannabis companies reported earnings this week, and — save for a few outliers — the dominant story was that the industry is starting to turn things around after a tough year.
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I spoke with CEOs and executives from a number of the firms that reported, and we'll have a story on that front next week, breaking down what they're seeing and how they're positioning over the next few months leading up to the election.
I'm not going to get into the gritty details here (you can check the press releases I've posted on my Twitter feed for that) but it's important to note that we're seeing some separation between the US and Canadian names, and we're starting to figure out which companies are built and managed for the long-term.
That's the one lesson from my years of reporting on the industry I'll leave you all with.
Cannabis, despite what many will have you believe, is a really popular product — the pandemic has shown that. Policy will follow public sentiment, sooner or later. When we talk about the recent struggles of the cannabis industry, it's not about whether this will become a multi-billion-dollar market.
We're talking about companies that have been mismanaged, duped investors and employees, and capitalized on a popular trend to make a quick buck. The market, in some respects, is doing its job filtering these players out. And we're reporting on all of it.
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The winners will be the companies led by experienced execs who diligently manage their balance sheets, communicate to investors and the media in a truthful way, ensure product quality and safety, and make investments grounded in what the data shows.
Wall Street analysts say a Democratic sweep in November that puts Joe Biden in the White House and the party in control of the Senate could be a boon for cannabis stocks.
Analysts at CIBC and Cowen picked 7 stocks to bet on that would benefit, including Green Thumb Industries, Curaleaf, and Canopy Growth.
Canopy Growth posted financial results that beat analysts' expectations as it aims for a turnaround under a new CEO.
The Canadian cannabis giant's CEO, David Klein, told BI he's "never been more bullish" on the future of the cannabis industry.
He says that the US will likely weigh some form of federal cannabis reform within the next year, cannabis beverages are an exciting emerging category, and legal cultivators will continue to chip away at the illicit market.
Klein said Canopy Growth has also engaged Bain to slash costs and help improve the company's margins.
Cannabis software startup Springbig closed an $11.5 million Series B funding round on Friday, led by San Diego-based venture fund TVC Capital.
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Springbig CEO Jeffrey Harris told me he was looking for a tech fund, rather than a cannabis fund, to lead the round as he wanted a partner who could help advise on the startup's growth.
Cannabis-tech startup Fyllo closed a $26 million Series A funding round, led by JW Asset Management and K2 & Associates.
Fyllo CEO Chad Bronstein shared the pitch deck he used to close the round exclusively with BI. The deck gives an inside look into how the startup is using AI and data to shape the future of cannabis retail.
Canadian medical cannabis firm MediPharm Labs has appointed Chris Halyk to its board. Halyk previously served as the president of Janssen Inc., a subsidiary of Johnson & Johnson.
Arizonans will also vote on legalizing cannabis after a ballot measure narrowly failed in 2016. Supporters of the measures turned in 420,000 signatures in support.
AdvisorShares is launching MSOS, an ETF (exchange traded fund) focused on US cannabis stocks. The ETF will be listed on NYSE Arca.
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