Seed Funding: 8 Cannabis Companies Looking For Investors

Cannabis 10x, a company that helps investors and companies find each other, hosted a round of investor pitches on the second day of the Benzinga Cannabis Capital Conference in Miami Beach. 

Kadenwood

Consumer brands will win the cannabis space in the long run, said Kadenwood CEO Erick Dickens. 

That’s why his company is focusing its efforts in its two CBD brands, Level Select and Purity Organic. he said. 

The company is vertically integrated and is dedicated solely to the production and sale of CBD.

Kadenwood raised $15 millions in its seed round in January and is now on its second round of funding, Dickens said. 

The expects to reach $30 millions in revenue in 2021.

For its series B round, Kadenwood is seeking $25 millions at a $186-million valuation, with 3.6 times in forward-looking revenue, the CEO said. 

Calyx Peak

Calyx Peak is a multi-brand operator working in California, Massachusetts, Missouri, Nevada and Ohio. The company holds licenses in five states. 

Calyx’s strategy is to build profitable brand-centered businesses through the development of robust consumer cannabis products. Its brands — Local, Josh D., Song and an upcoming house brand — represent all market segments in cannabis, from adult use to health and wellness and all price ranges. 

The company has secured dispensary locations in California and cultivation and distribution facilities in the five states where it operates.

Calyx plans to strategically expand to new states in the future. They’re expecting $27 million in revenue in 2020 and $97 million in 2021.

Driven

Driven Deliveries, Inc. DRVD considers itself a holding entity that handles distribution and supply chain for its consumer brands, rather than a consumer brand in itself. The company went public in 2018. Its brands are Ganjarunner, a California cannabis delivery service that works on schedule deliveries; and Budee, a sub-brand of Ganjarunner that works with on-demand deliveries.

Weedwaves is a social media platform that Driven uses to drive organic advertising to its other brands.

Today, 45% of Driven’s sales volume is cannabis flower. The company has a pending acquisition underway of True Humboldt, a California seed-to-sale operator.

Driven is valued at $100 million and expects a $40 to $45 million revenue in 2020.

Ascend Wellness

This holding company operates in the states of Illinois, Michigan, Ohio, New Jersey and Massachusetts. Ascend trusts its future success in focusing on states with large markets and limited licenses. It owns assets as a seed-to-sale operator and already operates active dispensaries and cultivation facilities in the five states.

The company is expecting $196 million in total revenue in 2020.

Fyllo

Fyllo was founded in March 2019 with a $19-million seed raise. The company offers compliance solutions for cannabis companies. Its business model offers regulation consultancy, creative advertising and other services that work under an AI platform.

CannaBrain, Fyllo’s data platform, uses artificial intelligence to leverage market data into segmenting consumer markets and audiences.

The company expects to solve online advertising problems that the cannabis industry faces today.

Verdemed

This company is looking to leverage the market opportunities growing in Latin America at the moment.

Verdemed has raised $7 million dollars to date to develop medical cannabis products similar to Epidiolex. They already have active operations in Colombia and Brazil and are starting operations in Chile. 

The agricultural segment of the company is based out of Colombia, where cultivation occurs. Manufacturing and distribution will be divided among other countries in the continent.

An isolated CBD line is already in production and will be available in pharmacies in Brazil within six months, according to the company. 

Verdemed is now looking for $12 million more in investments with a series B round. $3 million has already been committed to the company by its primary angel investor. 

Planet13

Planet 13 Holdings PLTH PLNHF is a high-end brick-and-mortar dispensary operator. Its strategy is focused on creating consumer experiences with stores featuring added value traits.

“It’s all about the experience,” said CEO Bob Groesbeck.

Today the company represents about 9% of total cannabis sales in Nevada, he said. 

Planet 13 is focused on tourist consumers: 85% of its consumer base is from outside Nevada and 13% is international.

The company had over $63 million in revenue in 2019 and its stores received more than 1 million visitors that same year.

Planet 13 plans to open a new, high-tech store in Santa Ana, California in the third quarter, Groesbeck said. 

The company is focused on tier one markets and is planning to open eight more stores in the next five years, he said.

Segra

Segra is a company focused on plant tissue culture, a disruptive cultivation technology that is not yet widespread in the cannabis industry.

Executive Chairman Jerry Kieran said the company is trying to bring the technology that drives success in other botanical productive industries like bananas, blueberries and strawberries. 

With this genetic technology, Segra is trying to solve the issue of inconsistency that comes with vegetative propagation — the most-used cultivation practice in the industry today — as well as variability, crop loss and ineffective plant density, Kieran said. 

Leafwire

This company calls itself “the LinkedIn of Cannabis.”

CEO and co-founder Peter Vogel said Leafwire was created as a platform to connect members of the cannabis industry in a centralized manner, without the lack of cannabis-focused content of LinkedIn, while allowing members to publicly share cannabis-friendly information.

The platform has 30,000 members and 2,000 daily active users. 

Leafwire’s revenue stream comes from advertising and a service exchange platform.

Job postings and premium subscriptions will drive revenue in the company’s plan for 2020, Vogel said. 

The platform produced over $150,000 in revenue in 2019 and is expecting to surpass $1 million in 2020 before reaching $27 million in 2023, he said. 

Within the next few weeks, Leafwire is expecting to close an investment round of $750,000, half of which is already covered, the CEO said.