Smoking Hot — A look at January’s Cannabis Deals
The cannabis world remains concerned that U.S. Attorney General nominee Sen. Jeff Sessions, could crack down on the legal marijuana industry. Sessions is a committed prohibitionist who said in 2016 that “Good people don’t smoke marijuana. But with four new recreational states in play, 2017 began on a note of cautious optimism.
-Filings show that Mike Gravel, a former U.S. Senator from Alaska and CEO of Cannabis Sativa Inc. (OTC:CBDS), sold stock in the company netting himself almost $450,000. The sale represented about a third of his holding. Analyst Alan Brochstein, who first reported the transaction at his site New Cannabis Ventures, said the sale represented approximately one-third of the former Senator’s holdings. An October filing shows a previous sale which netted Gravel $107,000.
Other senior Cannabis Sativa executives have also sold stock in CBDS, the proceeds of which, Brochstein writes “far exceed any economic value that has been created by the company, as CBDS reported sales of only $24,243 through the first three quarters of 2016.” “With a market cap of $145 million at a recent price of $7.83 it is not surprising to see so much insider selling, Brochstein noted.
-Canadian Bioceuticals (CSE:BCC) acquired a group of companies in Arizona and the option to buy a licensed grow in North Las Vegas for a total of $25 million. The Arizona companies are two not-for-profit licensees around Mesa and the brands Melting Point Extracts and Health for Life (dispensaries). The Arizona companies had $8.5 million in sales for the year ending March 31, 2016 accounting for about 5.2% of the Arizona market according to filings first reported on by Alan Brochstein.
Beth Stavola who sold the brands and will remain with a BCC subsidiary, was previously an institutional equity salesperson with the financial firm Jeffries & Co. London-based Chrystal Capital which raised money from investors in much of Europe, Hong Kong, Panama and the United Arab Emirates.
-Seattle-based data firm Headset raised $2.5 million. The investors were Arizona-based Hypur Ventures and Chicago-based Salveo Capital. Headset offers real-time data services that enable customers to follow sales trends, hot products and other actionable information. Headset CEO Cy Scott previously co-founded the cannabis information Web site Leafly, which is owned by the investment firm Privateer Holdings.
-CannaKorp, which makes a dosed vaporizer device often compared to a Keurig coffee machine, said it has raised $4.1 million. The lead investor was Singularity Capital Management, a Chicago private equity firm. CannaKorp’s CannaCloud vaporizes marijuana that is specially packaged in single-use disposable “pods.” Several of the company’s executives previously worked for Keurig Green Mountain and the device is often called the Keurig cup of cannabis. The investment round follows a $1.6 million raise earlier in 2016.
-Meanwhile, California-based consultancy MedMen agreed to acquire cooped up Bloomfield Industries, which held one of five New York State medical licenses, but had struggled as the state has been slow to allow more patients to obtain doctors’ recommendations. Under New York law, the entity will have to operate as Bloomfield until July 31 when its state registration expires. The companies did not disclose the acquisition price.
-Toronto-based Tokyo Smoke raised C$3 million, and claims to be the first Canadian cannabis consumer brand to raise capital. The company’s businesses include coffee shops, clothing in addition to cannabis which it says it will sell through legal channels beginning this year. Investors included Chuck Rifici, the co-founder of Canopy Growth, a Canadian producer traded on the Toronto Stock Exchange. Tokyo Smoke CEO Alan Gertner previously worked for Google and the business consulting firm Oliver Wyman.