Welcome to Cultivated, our weekly newsletter that gives you an insight into the offerings, trends, and personalities that are driving the multi-billion dollar global cannabis boom.
If you'd like a discount on BI Prime to read our stories, sign up here!
Happy Valentine's Day Cultivated Readers,
We were very aware that V-Day has been around for a while because of all the thematic press releases that were sent to us. From pre-rolls in the form of real flowers to massage oil based on cannabis, there seems to be a lot for all romantics.
Anyway, let's go into that.
We updated our list of ongoing layoffs in the cannabis industry again this week, and added Supreme Cannabis, which cut around 15% of the workforce on Tuesday. And with Aurora's 500 cuts in the past week, our number of cannabis layoffs is around 2,000.
Read about all layoffs here.
Canopy Growth and Aurora Cannabis also reported gains this week. According to analysts, Aurora's earnings weren't a surprise according to the guidelines published last week.
Both Canopy Growth and venture capital Canopy Rivers achieved quarterly results this morning, which we covered in our article here.
Canopy Growth surprised investors with a 49% increase in net sales to CAD 123.8 million in the last three months of 2019. Canopy's shares rose significantly about 12% in trade and other companies like Tilray and Aurora also rode the wave.
Jeremy is skiing in Utah this weekend, so Yeji is on the right track to cover the earnings. There is more to come!
-Jeremy and Yeji
Here's what we wrote about this week:
The liveliest startup in cannabis doesn't even sell marijuana.
Flowhub, a cannabis tech company that helps retailers track inventory and process sales, led Business Insider's recent list of the hottest startups in the industry. Flowhub was founded in 2015 and raised $ 27 million from investors. Today Flowhub works with more than 900 pharmacies in the United States.
The U.S. cannabis industry is expected to reach $ 85 billion by 2030, up from $ 51 billion. Flowhub, which is already operating in 12 states, will benefit from this as more and more states legalize cannabis.
According to Kyle Sherman, founder and CEO of Flowhub, legal cannabis is being rigorously persecuted. He said he likes to tell lawmakers on Capitol Hill that the U.S. is better at tracking legal cannabis than uranium.
The once glowing cannabis industry comes back to earth.
In recent months, cannabis companies – including venture capital-backed startups like Pax and giants like MedMen – have announced a number of job cuts that will affect over 2,000 people across the industry.
Supreme Cannabis, a Canadian cannabis grower, said Tuesday it was Elimination of 15% of the workforceincluding a third of company positions to reduce costs.
We continue to monitor layoffs in the industry Here, Please contact us if you have a tip.
Canopy Growth's recent gains could only end the long downturn in the cannabis industry.
In Friday's financial results, the company reported an unexpected 49% increase in net sales to CAD $ 123.8 million in the last three months of 2019. Bloomberg News also estimated that the company saw a smaller loss than analysts expected. That made the stock skyrocket about 12% in stores on Friday.
The results are a sign of good news for the industry. Other cannabis companies that have had some difficult months have also seen their inventories increase.
Raising capital, M&A activities, partnerships and starts
- European medical cannabis cultivator The Sanity Group has completed a $ 22 million Series A financing round managed by Calyx and HV Holtzbrinck Ventures. Other investors are Scooter Brauns TQ Ventures.
- area stocks secured a $ 100 million credit facility from undisclosed investors, a $ 50 million personal loan, partially from CEO Kevin Murphy, and a $ 30 million private placement.
- KushCo, a listed manufacturer of cannabis accessories, raised $ 16 million through a direct offer.
- Disruption Labs, the parent company of the CBD company Reset Biosciences, completed a $ 3.8 million launch round led by Andrew Garnock / AJR Consulting, a family office that had previously invested in medical cannabis ,
- Flowhub hired Craig Gomulka as CFO and Scott Schell as CTO. You can read more about Flowhub in Yeji's story here.
- Former Molson Coors marketing director Greg Butler joined Cresco Labs as the company's chief commercial officer.
- Aaron Keefer, the culinary gardener of the renowned restaurant The French Laundry, has joined Sonoma Hills Farm as VP of Cultivation.
Chart of the week
The legal cannabis industry supports 243,700 full-time jobs in the United States. Almost 40,000 of them are located in California, which is about 16% of all legal cannabis jobs in the country.
Take a look at the data from Leafly's job report here:
What we read
Instead of releasing this greenhouse gas, brewers sell it to pot farmers (Washington Post)
Nepalese lawmakers are trying to legalize marijuana growing (Associated Press)