REUTERS/Kevin Mohatt
A participant in a University of Colorado study on the effects of cannabis, examines the marijuana flowers he has grown in his backyard, in Longmont, Colorado, U.S., December 19, 2019.
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. Sign up here to get it in your inbox every week. If you want a discount to BI Prime to read my stories, sign up here!
Happy Friday,
Welcome to an extra special year-end edition of Cultivated! This is the last one you'll get to read before the next decade starts. I'll be off skiing some deep powder (hopefully) in Utah next week.
It's been fun putting this newsletter together every Friday since we started in July, and I hope you all enjoy reading it.
With that, let's get to it.
I had a whirlwind week at the MJBizCon in Las Vegas last week - I think I did something like 35 meetings over three days, wearing out the soles of my shoes in the process - but I found it to be a fruitful reporting trip.
It was my first time at the conference, and I heard the mood was a little more... dour... than in years past for obvious reasons. That being said, most investors and execs I spoke with laid out an optimistic case for the future of cannabis, though all acknowledged that the industry is going through its first painful correction.
You can read my story on the burst cannabis bubble, and where things are going to go, right here.
We also took a look at where cannabis investors are placing their bets in 2020. You guessed it: distressed assets are on everyone's radar.
And of course, we're still keeping track of layoffs around the industry, and we're bringing you scoops. In the latest one, we broke the news of Green Bits' new CEO, Barry Saik, and got the first interview with him.
Until next year.
-Jeremy
Here's what we've been writing about:
5 top cannabis VCs told us where they plan to place their bets, from scooping up distressed assets to the emergence of new markets in Germany and China
We asked 5 of the top investors at cannabis-focused funds about where they're looking to invest in 2020.
They discussed why they're still bullish on the industry despite a tough year. Some deemed it a necessary market correction.
From distressed assets to new cannabis tech to emerging cannabis markets like China and Germany, read on for their predictions.
2019 was the year the cannabis bubble burst. We talked to more than a dozen top cannabis execs about what's next.
The cannabis bubble, propped up by a thriving market for reverse takeovers on the Canadian Securities Exchange, has burst.
Business Insider spoke with over a dozen top CEOs and execs about the industry's prospects. They said that while the shakeout is here - and some companies will likely fail - the business will turn around.
The current period of low valuations provides an opportunity for savvy investors to put money to work, and for stronger companies to buy up their rivals, executives said.
A cannabis startup backed by Tiger Global just swapped its longtime CEO for a tech-industry veteran. We got the first interview with the new exec.
The cannabis-tech startup Green Bits is bringing in Barry Saik, a tech-industry veteran, as its new CEO. He'll be taking over from cofounder and longtime CEO Ben Curren.
Green Bits is a Silicon Valley-based software platform that provides point-of-sale and retail-management services to cannabis dispensaries in California and other states where cannabis is legal.
The company is backed by Tiger Global Management - the firm led Green Bits' $17 million Series A funding round in April 2018.
A VC who runs a $200 million cannabis fund told us why China is the next big frontier for cannabis and hemp
Canopy Rivers CEO Narbe Alexandrian talked with us about the key trends he's watching in cannabis in 2020 on the sidelines of MJBizCon Las Vegas, the industry's largest annual conference.
Among the top trends where he's looking to invest: hemp in China, hyper-focused brands, and cannabis tech.
The world's largest cannabis company has a new CEO, and Wall Street is betting it's a sign that Canopy Growth's investors aren't willing to wait for results to improve
Canopy Growth named David Klein, Constellation Brands' chief financial officer, as the cannabis giant's new CEO. He'll be taking over from Mark Zekulin, effective January 14.
Analysts had mostly mixed reactions to the news and said it was a sign that Constellation is doubling down on its control over Canopy Growth.
Capital raises, M&A activity, partnerships, and launches
- Curaleaf announced a $275 million secured loan facility, at a 13% interest rate. Cowen analyst Vivien Azer called it "exceedingly helpful in addressing near-term cash commitments" and maintained her outperform rating on the stock.
- iAnthus raised $36 million of senior convertible notes from cannabis investment firm Gotham Green Partners. The raise is part of a planned $100 million financing.
- NASDAQ-listed Akerna is acquiring Canadian cannabis company Ample Organics in a $45 million deal.
- Boston-based Ascend Wellness Holdings raised $28.2 million from a number of investors, including Salveo Capital and JM10. The company plans to deploy capital to go after the newly opened Michigan and the soon-to-open Illinois recreational cannabis markets.
- Holistic Industries is spending $20 million on a new headquarters in Michigan, which will include a cultivation facility and a flagship retail store. Holistic Industries is also partnering with the estate of Grateful Dead legend Jerry Garcia to release the Jerry Garcia 2020 cannabis collection.
- Canopy Growth released First & Free, a line of hemp-derived CBD products in the US. The products are available to purchase online.
- Canadian medical cannabis company FSD Pharma has received approval to list its shares on the NASDAQ. They'll begin trading soon under the ticker HUGE.
- Green Growth Brands terminated its planned $50 million acquisition of MXY Holdings, or Moxie, as "the market adjusts to the changing macro environment." For more information on that changing macro environment, see my story from October.
- Tilray has completed its merger with Privateer Holdings.
Executive moves
- Harvest Health & Recreation is beefing up its advisory team. Daniel Reiner joins as a special advisor to the board, and Scott Atkinson will join as co-executive chairman.
- Medical Marijuana Inc (MJNA), an OTC-listed cannabis company, promoted Brooke Beers to CFO from VP of corporate finance.
- David Kelman is joining the investment bank Stifel as a managing director in the consumer & retail group, where he'll oversee US cannabis investment banking from Stifel's New York office. Kelman was previously a managing director at Viridian Capital Advisors, a cannabis-focused advisory.
- ManifestSeven (M7) has appointed Hélène Blanchette, formerly a VP at Xerox, as president of MyJane, M7's retail subsidiary targeted towards women. MyJane president cofounder Kim Kovacs is leaving the company.
- Jeanette VanderMarel has resigned from her position as COO of Beleave Cannabis after less than two months on the job.
Chart of the week
With all of the doom-and-gloom around cannabis capital markets, I think it's important to keep this in mind:
Shayanne Gal/Business Insider
What I'm reading
Cannabis' largest trade show is pretty ordinary, and that's what the industry wants (CNN Business)
Leafly investigation: Inside the billion-dollar race to patent cannabis (Leafly)
From Canada's legal high, a business letdown (New York Times)
Pot firms' grim reality: cash crunch, no U.S. bankruptcy access (Bloomberg News)
The budtender will see you now (Politico)
A company is sending cannabis and coffee to space to see if they mutate (Vice)
Traders betting against pot stocks made almost $1 billion in 2019. Here are the 8 stocks most responsible for those gains. (Markets Insider)
Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter @jfberke.
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