CULTIVATED: Layoffs at Greenlane Holdings, big law is coming for cannabis, and more
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Happy Friday,
Hope everybody is washing their hands for at least 20 seconds these days...
The biggest piece of cannabis industry news this week was perhaps Canopy Growth's closure of its two, multimillion-dollar indoor growing operations in British Columbia, which eliminated 500 positions at the company, bringing the total number of layoffs in the industry to over 2,600 in the past few months.
In Canopy's announcement of the closures, the company said it no longer plans to bring a third greenhouse in Ontario online, and that it will shift its resources to growing cannabis outdoors, which is much cheaper.
That's a trend we're watching closely. As more countries around the world weigh friendlier cannabis policies, it's likely that we'll see cannabis growing shift to warmer climates - where the plants can grow outdoors, much like any other crop.
Analysts, however, said that while the greenhouse closures are beneficial from a profit-maximization standpoint, they have questions over the quality of the cannabis plants grown outdoors in Canada.
We'll see how this all shakes out.
One more topic on our radar: SPACs (special purpose acquisition vehicles). Yeji and I listened in on Viridian's webinar yesterday, where the firm's president, Scott Greiper, predicted that "SPACs will become the most aggressive buyers in the cannabis industry."
He's probably correct, given that cannabis SPACs have raised over $1.5 billion in the last few months, as other sources of capital have dried up.
To that end, we did a story in October about how SPACs could be the avenue that lets Wall Street's biggest banks play in cannabis.
We also covered Subversive Capital's $225 million raise for a SPAC real estate investment trust.
-Jeremy
Here's what we wrote about this week:
A leaked memo reveals that cannabis-vaporizer company Greenlane Holdings quietly laid off 31 employees in February
Greenlane Holdings is the latest company to feel the effects of the cannabis-industry downturn.
The Nasdaq-listed cannabis-vaporizer and accessories company laid off 31 employees across its Torrance, California, and Boca Raton, Florida, offices on February 18, according to three former employees with direct knowledge of the cuts and a memo obtained by Business Insider.
CBD company Neptune Wellness poached a senior Unilever exec to take over its sales. Here's how Scott Antony plans to tackle his new role.
Scott Antony, a senior Unilever exec, is stepping into the cannabis industry.
Antony was previously the VP of Sales for Target at Unilever, where he helped sell brands like Axe, Dove, and Lipton to the giant retailer. He's joining cannabis company Neptune Wellness Solutions as its new VP of US retail sales, where he'll use those skills to convince major US retailers and grocers to offer the company's CBD products.
Major law firms are ramping up efforts to win cannabis clients as they stake claims to an industry that could be worth $85 billion
As the cannabis industry has ballooned into a $56 billion market, and startups have gone public and expanded into multiple states, they've found that they have complex legal questions that range from real estate to intellectual property to business law to zoning.
Enter law-firm giants like Reed Smith, Locke Lord, and Dorsey & Whitney, which have all formed industry teams to take on cannabis clients. Plus, boutiques like Vicente Sederberg are popping up, focused entirely on serving cannabis firms.
Capital raises, M&A activity, partnerships, and launches
- Psychedelic medicine company MindMed completed a reverse takeover to list on Canada's NEO Exchange, which the company says makes it the first publicly traded psychedelic medicine company.
- Ex-Canopy Growth CEO Bruce Linton is launching Collective Growth, a $150 million SPAC that will target US hemp and CBD investments. Collective Growth filed its launch paperwork with the SEC on February 28, targeting a Nasdaq listing.
Executive moves
- The Drug Policy Alliance, a nonprofit that advocates for cannabis reform and the regulation of other drugs, has named Kassandra Frederique as its new executive director. Frederique, who started out as an intern at DPA, will officially assume the top job in September.
- Buddy Media cofounder Jeff Ragovin is joining Fyllo, a cannabis tech startup, as the company's chief commercial officer.
- Mark Burrier is joining Viridian Capital Advisor's investment banking team. Burrier previously held senior roles at Bank of America and Stern Agee.
- Cresco Labs cofounder and president Joe Caltabiano has resigned from the company to pursue other opportunities.
- Canadian cannabis company Organigram Holdings has appointed Derrick West as the company's CFO. He'll take over from Paolo De Luca, who will become the company's chief strategy officer.
- Jushi Holdings added four senior executives to its marketing and finance team.
Chart of the week
What we're reading
Cannabis drinks have been legal for over 2 months in Canada - so why aren't they on the shelves? (CBC)
Psychedelic therapy has a sexual abuse problem (Quartz)
The CBD Entrepreneur Who Went Through Hell in a Burmese Prison (GEN - Medium)
Concerns looming over coronavirus impact on hemp industry, but some US firms could gain from fallout (Hemp Industry Daily)
3 leadership lessons all first-time founders should know but are rarely told, from a 30-year-old entrepreneur who raised $8 million for her cannabis-focused tech platform (Business Insider)
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 at (646) 376 6002.
