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Happy Martin Luther King Jr. weekend everyone,
It's only mid-January but already it feels like a lot has happened in cannabis.
Before we begin, let me introduce myself: my name is Yeji and I'm Business Insider's new (and first ever) cannabis editorial fellow. Like Jeremy, I hail from Canada. I'll be contributing to Cultivated regularly while I'm here and sometimes I'll be taking over for the week, like I am today.
Let's get to it, shall we?
Canopy Growth's new CEO, David Klein (former CFO of Constellation Brands), officially started in his new position this week, over a month after the news was announced. Other executive moves include a new COO (Jon Levin, a former executive at Revlon) and CFO (Michael Kruteck, formerly at Molson Coors) at Tilray and a new Chief Strategy Officer at Fyllo, a cannabis marketing technology platform.
OrganiGram's Q1 earnings report this Tuesday sent its stock prices soaring. The company also announced a three-year supply agreement with Medical Cannabis by Shoppers, a subsidiary of Canadian retail pharmacy chain Shoppers Drug Mart.
We talked to some of the top VCs investing in cannabis this week and asked them where they were excited to spend their money in 2020. Areas that came up again and again included: advertising technology, international opportunities for CBD and hemp, drug-delivery platforms, lab testing, and synthetic cannabinoids.
We also reported on layoffs at CBD and hemp companies Mile High Labs, and GenCanna. You can find ways to securely reach us at the bottom of this newsletter if you have a tip.
-Yeji
Here's what we wrote about this week:
2 hemp and CBD startups just laid off workers as the industry confronts a uniquely challenging phase
Mile High Labs, a Colorado-based CBD manufacturer, laid off 20 staffers. CFO Jon Hilley told us in an interview that the layoffs represent just under 10% of total workers, out of a head count of 250 before the layoffs.
GenCanna, a private Kentucky-based hemp and CBD producer founded in 2014, laid off 65 workers in December. Even with the layoffs, the company started 2019 with 162 employees and ended the year with 224 employees after the layoffs, excluding seasonal farmworkers. Steve Bevan, the company's president and executive chair, pointed to increasing automation of the hemp and CBD supply chain as one of the reasons for the layoffs. "Because of significant advances in technology, we need fewer people to do more," Bevan said.
Cannabis companies have slashed over 1,000 jobs in recent weeks as the industry contends with a 'toxic' landscape. We're keeping track of all the cuts here.
We're tracking layoffs across the cannabis industry. With more than 1,000 jobs slashed in recent weeks, it seems that the once-thriving industry is grappling with a downturn.
Here are the top 14 venture-capital firms making deals in the cannabis industry, and where they're looking to place their next bets
We talked to some of the top venture-capital firm in the cannabis industry. We identified the top VCs based on how many investments they made in 2019 and asked them which verticals and companies they were looking to invest into in 2020. The firms told us they were looking to invest in areas such as advertising technology, international opportunities for CBD and hemp, drug-delivery platforms, lab testing, and synthetic cannabinoids.
VC investing in cannabis surged above $2 billion in 2019, but a year-end slowdown raises questions about 2020
We looked at how much money VCs put into cannabis in 2018 and 2019, analyzing when investments surged, when they declined, and why, using data from PitchBook. Though investments declined steeply in the second half of 2019, the year's slowest quarter (Q4) drew almost as much as the first two quarters of 2018 combined, pointing to a still-growing industry.
In other news this week:
- Fyllo, a cannabis marketing technology platform, announced that it has acquired CannaRegs, a web-based subscription service and technology platform. This acquisition follows Fyllo's recent $18 million funding round, which closed in September. Amanda Ostrowitz, founder and CEO of CannaReg, will step in as the new Chief Strategy Officer of Fyllo.
- In celeb news, Carlos Santana, the ten-time Grammy-winning guitarist and longtime cannabis advocate, announced a partnership with Left Coast Ventures to develop cannabis and CBD brands.
Chart of the week
Here's a look at how much VCs invested in the cannabis industry during the past two years. Read more about it here.
Graphic by Business Insider
What I'm reading
She embodied the hopes for L.A.'s cannabis program. Can she overcome its stumbles? (Los Angeles Times)
Cannabis biz giants and advocates finally come together in legalization fight (Crain's New York Business)
CDC: One in Ten Vape Products Linked to Lung Illness Bought From "Commercial Sources" (Cannabis Wire)
Congress investigates lifting some cannabis restrictions (CNN)
Even when sober, frequent marijuana users are dangerous drivers, report finds (NBC)
Did we miss anything? Have a tip? Just want to chat? Send us a note at cannabis@businessinsider.com or find Business Insider's cannabis team on twitter: @jfberke & @jesse_yeji. You can also reach Jeremy on encrypted messaging app Signal on request.
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