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.
Happy weekend everyone!
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.
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.
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.
Here’s what we wrote about this week:
Top Wall Street analysts say these are the 7 cannabis stocks to bet on now that will benefit if Biden defeats Trump in November
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.
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.
The cannabis-tech startup Fyllo used this pitch deck to land $26 million. Here’s an inside look at how it’s using AI to shape the future of cannabis retail.
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.
Foto: An employee of Clever Leaves company cuts cannabis plants at a greenhouse in Pesca, Colombia October 2, 2019. Source: REUTERS/Luisa Gonzalez
- Rob Kelly, the former investor relations director at Aurora Cannabis, has joined cannabis PR firm Mattio Communications to lead its IR team.
- 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.
Deals, launches, and policy moves
- Montana residents will vote on a pair of ballot measures to legalize cannabis for adults over the age of 21 and to permit cannabis retail in the state.
- 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.
What we’re reading (and listening to)
The Syndicate, an 8-episode narrative podcast on the rise and spectacular fall of a Colorado marijuana smuggling ring, launched this week. It’s hosted by journalist Chris Walker, and it’s well worth the listen.
In latest suit, Curaleaf sued for unwanted text messages (Marijuana Business Daily)
Canopy Growth CEO’s partial-year compensation tops CA$45 million (Marijuana Business Daily)
New York had hoped for a hemp boom, but another major player is dropping out (The Auburn Citizen)
Does CBD really do anything? (FiveThirtyEight)