Somebody should create a Munchbase to track startup capital returning to cannabis.
Overall U.S. venture capital transactions declined from $46.4 billion in the third quarter of 2022 to $31.7 billion over the same July through September time period this year. The downward trajectory for cannabis deals – both for licensed operators and venture-backed ancillary startups – was considerably more potent.
Cannabis companies of all types and sizes navigating through this double-whammy hit to their valuations and funding prospects over the last 18 months may now be ready to truly exhale.
Green chutes in cannabis rooted in national policy- particularly movement with Congress (when it convenes!) and the Biden administration – are attracting the attention of investors.
What remains to be seen is if and to what degree canna-curious individuals, family offices, and early-stage (or even later-stage strategic) institutional investors will put some skin in the sector with prices depressed and longer-term outlooks blooming like a rose.
Here are three examples of recently closed early-stage cannabis transactions of note.
According to Crunchbase, San Francisco-based digital insights platform Happy Cabbage Analytics raised $2 million from cannabis venture investor Delta Emerald Ventures. That family office-backed investment firm is also an early investor in Vangst, Jane Technologies and multiple digital cannabis startups. Happy Cabbage recently acquired Colorado-based brand marketing and training platform ZoleTrain.
Last May, Poseidon Asset Management funded a Series A round of financing raised by Livermore, California-based Buzzkill Labs. That company develops highly vetted technology designed to measure cannabis impairment in individuals (more granular and actionable than today’s tests that monitor for traces of the plant in the system.)
As reported last month in Grown In, Chicago-based edibles maker The Bettering Company recently secured $6.7 million to roll out its designer products in Illinois and fund geographic expansion. One key strategic investor is RXBar co-founder Peter Rahal.
The bus drives by and you get on and that’s where it all begins
Minority-owned and vertically-integrated Illinois operator the 1937 Group recently will be rolling up to a community near you (not just its home state) as part of the mission of its newly formed 1937 Foundation.
The Foundation exists to help those in communities that in many cases are disproportionately impacted by the failed war on drugs “see past trauma and build to heal and build a healthy and financially sustainable life experience.” Money for this venture, which is not cannabis-specific, comes from state grants as private philanthropists.
Last month, Grown In had the opportunity to sit down with the 1937 CEO Ambrose Jackson to discuss how this new initiative was modeled after the work his company did in 2019 to demonstrate its community development plan while applying for the first round of Illinois social equity expansion licenses.
On Sunday, October 8, The 1937 Foundation Presents KVL Flower Ball at Cine Studios in Little Village. The annual KVL Flower Ball is an unprecedented culture, fashion and community experience! Tickets for the Expo, Fashion Show and other delights are still available.
The Burn ‘Em Plan Executive Summary
Recently Grown In convened a summit of leaders from local and national cannabis industry leaders or an all-day summit and planning session to discuss what it will take to help the cannabis industry in Chicago and Illinois reach its full potential.
Discover what they say it will take to fortify Chicago’s leadership position in commercial cannabis, drive innovation and job creation, and grow economic opportunities in Chicago and beyond.