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Happy Friday everyone,
There was a slew of (mostly disappointing) cannabis earnings this week. MedMen, grappling with the fallout of the from the canceled Pharmacann acquisition, dropped close to 20% after reporting earnings after the market closed on Monday. The cannabis dispensary chain posted a net loss of $277 million over the past year and announced it planned on 'tightening' its focus to core markets in California, Nevada, Florida, New York, Massachusetts and Illinois.
Hexo Corp posted disappointing — if unsurprising — earnings, losing $57 million (CAD) over the past quarter and announced it was delaying the launch of new products.
The plan would immediately deschedule cannabis, and would bar tobacco companies — one of which already owns a significant chunk of Cronos Group — from participating in the industry.
Here's what we wrote about this week:
A hot cannabis startup just raised $18 million in a down market by promising investors it can more than quadruple sales in a year. See the slides that show exactly how 1906 plans to pull that off.
The cannabis-edibles brand 1906 closed an $18 million funding round led by Navy Capital. The funding brings the company's valuation to between $40 million and $50 million.
In an interview with Business Insider, 1906 CEO Peter Barsoom discussed some of the challenges around raising capital for cannabis companies in the private market and how he plans to more than quadruple revenue by next year.
Barsoom gave Business Insider an exclusive look at the pitch deck that 1906 just used to raise the funds.
Cannabis site Leafly is freezing hiring and canceling non-critical travel to rein in spending. We got the full internal memo.
Cannabis website Leafly is taking steps to limit spending, according to an internal memo obtained by Business Insider.
Leafly is pausing most hiring, cutting all non-essential travel for employees, and reining in its yearly holiday party, according to a memo obtained by Business Insider.
"We're taking Q4 to get our very large new team settled and ready for 2020, while continuing to fill some select product and engineering roles, which is the responsible thing to do," a Leafly spokesperson said.
Capital raises, M&A activity, partnerships, and launches
- Materia Ventures, a Canadian cannabis company focused on the European market, has officially launched and announced its leadership team, which includes Deepak Anand as CEO, Nick Pateras as managing director, Europe, and Dennis Beker as VP, legal & corporate strategy, among others.
- Curaleaf has repriced its deal to acquire the Select Brand from Cura Partners. The deal, initially valued at $949 million when announced in May, will be reduced in scope due to "changing market conditions" the companies said.
- iCan, an Israeli cannabis incubator, has entered into a partnership with Headquarters (HQ), to provide Israeli cannabis companies with access to the lucrative California market.
- Canopy Growth gave reporters a sneak peek of its new cannabis beverages — which are set to hit the Canadian market in December — which include a low-dose CBD and THC brand called Quatreau, and a stronger drink called "Deep Space," among others.
- Cannabis edibles company 1906 closed an $18 million funding round, led by Navy Capital. We got the pitch deck here.
- John Kaden stepped down from embattled Canadian cannabis producer CannTrust's board. Kaden is a co-founder and managing partner of Navy Capital, a cannabis-focused fund in New York.
- John Fowler stepped down from his position as Chief Advocacy Officer at The Supreme Cannabis Company. Fowler co-founded Supreme Cannabis' flagship brand, 7ACRES. The company has not yet announced a replacement.
- Matt Miller resigned from his position as general counsel of Green Thumb Industries. He'll be replaced by Beth Burk, who joins GTI from financial services firm Aon, on an interim basis.
- California cannabis company Harborside ousted its CEO, Andrew Berman, who held the position since February 2018. He'll be replaced by Harborside's chairman, Peter Bilodeau, on an interim basis.
- 48North Cannabis Corp's former CEO, Jeannette VanderMarel, stepped down from the board of directors. She'll be replaced by Alan Gertner, the founder of Hiku (Tokyo Smoke) and the former Chief Retail Officer of Canopy Growth. VanderMarel is now the CEO of Beleave, a Canadian cannabis company.
- Vertical Brands named Cynthia Cleveland as the cannabis firm's new president.
- The Marijuana Policy Project, a nonprofit, has appointed Mark de Souza to its board of directors. De Souza is the CEO of Revolution, a Chicago-based cannabis company.
Chart of the week
Recent headwinds around the cannabis sector notwithstanding, the industry is still set for some eye-popping growth in the US. Check out this chart from BDS Analytics and Arcview Market Research:
Stories from around the web
Cannabis open houses are putting the high in high-end real estate (Wall Street Journal)