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Cannabis edibles brand 1906 raised $18 million in funding amid an industry downturn. We got an exclusive look at the pitch deck that made it happen.

Raising money in the cannabis industry is hard. Peter Barsoom, the CEO of 1906 — a Colorado-based cannabis edibles brand — can attest to that.

His company closed an $18 million funding round on Tuesday, bringing the infused-chocolate maker's valuation to between $40 and $50 million, the company said. The round was led by Navy Capital, a cannabis-focused fund in New York City, and included a range of high-net-worth individuals and repeat investors.

Barsoom shared the pitch deck that he used to raise this round exclusively with Business Insider. You can scroll down to see the full deck.

1906 CEO Peter Barsoom.

Courtesy of 1906

Barsoom, who came to cannabis after working in senior roles across Morgan Stanley, Merrill Lynch, and Blue Mountain Capital, said it took seven months to close the funding round.

"We did see headwinds like anybody in the cannabis space," Barsoom told Business Insider over the phone. "The fallout from the IPO bubble happened fast and furious."

Once plentiful, at least at the early stages, growth capital has slowly dried up for cannabis companies as public companies in the sector have seen their share prices crater. That's made venture investors wary of startups in the space, Barsoom said.

"I think that many companies went out to the public markets thinking that capital was infinite and time horizons were infinite," says Barsoom. "So I think what we're seeing today is likely to be the and the Webvans of the cannabis space."

For that reason, Barsoom said he's focused on keeping 1906 private — for now.

"The right set of capital that needs to fund this industry is growth capital, and not necessarily public market capital. So there was a mismatch that led to a bubble and sharp decline," says Barsoom.

But for long-term investors, Barsoom says the thesis holds that cannabis "is one of the most exciting and fastest-growing segments of the economy that anybody has witnessed in our history."

1906 is using the fresh funding to expand to the East Coast

This latest funding round builds on 1906's pre-revenue raise in 2016 when the company raised $2.7 million.

With the fresh capital, Barsoom is looking to expand 1906's low-dose THC and CBD infused chocolates to new state markets, including Michigan, Illinois, and Massachusetts — states where he says the company can generate the highest return on invested capital.

"California is a crowded market," Barsoom said. "I'm from the East Coast. We think our brand has a strong resonance with East Coast consumers and has an East Coast sensibility."

To that end, 1906 released a line of "Drops," or pressed tablets that contain low doses of THC and CBD, as an alternative to the company's infused chocolates.

1906 isn't the only company to release a line of infused tablets. Cannabis startup Dosist — which is known for its vapes — released tablets in October as well.

And despite the expansion plans, Barsoom says he believes in running a "lean team."

"We've seen — literally in the last week or two — hundreds of layoffs in the industry, where companies have unfortunately overextended themselves with hiring and that has resulted in a pretty significant pullback," says Barsoom. "We're focused on disciplined growth, adding people where critical and staying lean, and kind of finally not overextending ourselves."

See the pitch deck that 1906 used to raise $18 million below: