August Roundup: No summer slump for cannabis business deals
August saw a flurry of U.S. deals. While U.S. Attorney Jeff Sessions has made no secret of his distaste for cannabis, and moved to block medical marijuana research, he has not pursued a wide-reaching crackdown on the state legal market. Here are some of the notable deals and moves from the past month.
Seattle-based Privateer Holdings, parent company to Leafly, Marley Natural and Canadian medical marijuana producer Tilray raised $58 million. After a $75M raise in 2015, Privateer was valued around $500M. It did not update the valuation or name its new investors. Founders Fund, the venture capital firm started by Facebook investor Peter Thiel, invested in the 2015 round.
Tilray is investing $24M to convert an Ontario pepper farm into one of the country’s largest legal grows.
Geoff Lewis, the Founders Fund partner who led the Privateer investment is leaving Founders Fund. The reason reportedly involves political differences with Thiel, who supported then-candidate Donald Trump during the 2016 presidential campaign
Social media app MassRoots acquired legal company CannaRegs in a $12 million stock deal. CannaRegs is a subscription database featuring current federal, state and local cannabis laws. According to a statement, CannaRegs is cash flow positive and has annual revenue of more than $450,000. In May, MassRoots, which trades over the counter, said it had to raise $5 million to continue to fund operations. In July MassRoots acquired Odava, an MJ software compliance firm in a $1.75 million stock deal.
Irvine-Calif.-based Terra Tech said it would acquire 50% of NuLeaf, which holds cultivation and production licenses in the Reno area and is currently building grow and production facilities expected to open in the fourth quarter of this year. Publicly traded Terra Tech owns the cannabis brand IVXX and Blum which operates dispensaries in California and Nevada.
Technology and media company HERB raised a $4.1 million seed round. Lead investor Lerer Hippeau has invested in media companies including Buzzfeed, Pando Daily, and ChartBeat. Other investors in the round included Slow Ventures, Michael Lazerow, Bullpen Capital, WeWork executive Shiva Rajaraman, Liquid 2 Ventures (NFL great Joe Montana is a general partner), Shopify CEO Tobi Lutke, Harvey Finkelstein, and Adam Zeplain.
Canadian medical marijuana producer Aphria said it had invested C$11.5 million in Toronto company Scientus Pharma through a convertible debenture. Scientus is developing cannabis-derived pharmaceuticals.
Canadian media and technology platform Lift raised C$3 million in series A funding. Lift has 20 employees and is among the most prominent cannabis brands in Canada.
Cannabis point of sale software provider Green Bits raised $2.2 million to fund expansion into new markets. Green Bits currently serves more than 700 dispensaries. Casa Verde Capital, an investment vehicle associated with rapper Snoop Dogg participated in the round.
Testing company Steep Hill raised $2 million. The company says it has grown 50% year to date.