September Roundup: California Regulators Scramble Ahead of Recreational Legalization
With less than 100 days until California’s recreational market opened, regulators across the state scrambled to get rules in place.
As the world’s largest legal market prepared to open, U.S. Attorney General Jeff Sessions continued to express his dislike for cannabis but lost his bid to end a federal budget amendment that blocks him from spending federal dollars to prosecute state-legal medical marijuana businesses.
The Rohrabacher-Blumenauer amendment has been extended until December. Here are some of September’s notable deals:
California delivery app Eaze raised $27 million in Series B capital. Bailey Capital led the round with participation from DCM Ventures, Kaya Ventures, and FJ Labs. Eaze says its gross sales have tripled since last year, though it has received some attention for its high burn rate.
Canadian medical marijuana producer Tilray said it would invest C$30 million to build a medical marijuana grow in Portugal. It expects to export product to other European Union countries from the facility. The company says it’s the first company, foreign or domestic, to win a license to grow medical marijuana in Portugal. Tilray parent company Privateer Holdings is based in Seattle.
Southern California cannabis company Terra Tech acquired The Reserve, an Orange County dispensary, for $7 million. The Reserve was previously co-owned by rapper The Game. Terra Tech plans to rebrand the dispensary under its Blüm brand, which has a presence in Oakland and Las Vegas. Terra Tech also produces the cannabis brand IVXX.
Nevada switched its seed to sale tracking software from MJFreeway’s Leaf Data system to Franwell’s METRC, which is used in Colorado and Oregon. The change was unexpected as MJFreeway was less than two years into a five year contract. However the company has suffered at least two embarrassing data breaches this year.
Front Range Biosciences, a biotech firm serving the cannabis industry, raised $3 million. The company uses tissue culture to help growers ensure they are working with healthy plants. Investors in the round include Phyto Partners, Salveo Capital, Sand Hill Angels, Harvard Business School Angels of NYC, NY Angels, Halley Venture Partners, Anthill Ventures, and Canopy Boulder. Front Range Biosciences is based in the Denver area.
Israeli medical marijuana firm Tikun Olam signed a deal with MariMed, a cannabis-oriented Massachusetts holding company. Beginning next year, the agreement is designed to bring Tikun Olam products to Massachusetts, Illinois, Maryland and Rhode Island. Tikun Olam products are already available in Delaware and Nevada and plans to arrive in Washington state soon.
Toronto-based Green Acre Capital closed its first cannabis investment fund at C$25 million. The lead investors were York Plains Investment, W. Brett Wilson and Aphria. GAC plans to invest in Canadian ancillary businesses.
Snoop Dogg’s Casa Verde Capital, led a $2 million seed round in Trellis, an inventory management software provider with offices in Toronto and Oakland. The Oakland-based cannabis business incubator Gateway also participated. Trellis graduated from Gateway’s first entrepreneurial bootcamp in 2016.
High-end cannabis chocolatier Défoncé signed a tentative deal to open a shop in San Francisco’s . If it goWestfield malles through it would be the first cannabis storefront in a “class A” (the most successful) shopping center.
Denver-based Hoban Law Group aired a commercial on Fox, MSNBC and other cable channels. It was the first time a cannabis oriented television ad aired nationally.