Welcome to Insider Cannabis, 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 Friday readers,
There’s never a dull week in cannabis. After much hand-wringing — yes, legalizing cannabis is a much more complicated issue than it seems — the House vote on the MORE Act, a bill to federally decriminalize cannabis, has been delayed until the lame duck session after the election.
Cannabis legalization is popular among voters. But it’s politically tricky, as the back-and-forth this week reveals. In the meantime, cannabis investors, execs, and analysts aren’t waiting. They say what happens in states like New Jersey is much more important.
I spoke on two panels at the Luxury Meets Cannabis Conference this week, one with Merida Capital’s Mitch Baruchowitz — who discussed the future of investing in cannabis, and another with a few cannabis execs who discussed the branding challenges as more states legalize cannabis.
Yeji is working on a series with the top cannabis VCs, who say they’re shifting dollars from early-stage startups to growth-stage firms. You can read the first of that series here.
Here’s what we wrote about this week:
Venture investors are piling into red-hot cannabis tech startups, despite the industry’s struggles. Here’s why mainstream funds are betting on software over pre-rolls.
Cannabis tech has become the lone bright spot in an industry that has stumbled in recent months, getting $57 million in VC funding since July 1. It’s the first time that cannabis tech and software companies took in more money than other sectors of the industry, such as firms that grow or sell marijuana.
Top cannabis VCs are now searching for companies with proven track records. 6 investors share what it would take for a new startup to grab their attention.
VCs say they’re shifting their investment dollars from early-stage firms to growth-stage companies that already have a proven track record. Many investors told us they’re still open to new startups, if they have the right qualities and management team.
3 cannabis execs share how they’re positioning their firms to profit as more US states are poised to legalize recreational marijuana
I talked to CEOs at three cannabis companies on Wednesday’s Luxury Meets Cannabis Conference who shared how they planned to profit as the cannabis market potentially grows in the coming years. Companies say that as more states legalize cannabis, building up a national brand will be key to winning a major stake in the market.
A top Wall Street analyst lays out how New Jersey could create a ‘domino effect’ of cannabis legalization across the Northeast and shares the 5 stocks that will benefit the most
Of the handful of states that have adult-use cannabis on the ballot, New Jersey has been tapped as the state most likely to legalize once November rolls around.
Cowen analyst Vivien Azer says that if New Jersey voters choose to legalize the drug, it could push neighboring states like New York, Pennsylvania, Connecticut, and Rhode Island to do the same.
- Curaleaf appoints Talley Wettlaufer as SVP of Retail, succeeding Chris Melillo, who is departing the company.
- Cresco Labs announced the promotions of David Gacom, Melissa Wagamon and Sean McAlister to regionally focused president positions, to focus on California, the Midwest, and the Northeast.
- Fyllo announced a slew of strategic advisors and a new board member, with experience across companies like Dunkin, Omnicom, and WeWork.
- Hexo Corp appoints Trent MacDonald as its new CFO, the Quebec-based cannabis cultivator’s third CFO within a year.
Deals, launches, and IPOs
- The House vote on the MORE Act, a bill to decriminalize cannabis federally, was pushed back to after the election as lawmakers decided to focus on passing COVID-19 stimulus first. Lawmakers say the vote will be held sometime this Fall.
Chart of the week
Cowen predicts that if in November, Arizona and New Jersey legalize adult-use and Mississippi and South Dakota pass medical programs, the US cannabis market could see an additional $284 million in revenue as soon as 2021. By 2025, the US cannabis industry could be around $3 billion more than it would have been without new states coming online.