Marijuana Business Magazine March 2019

Marijuana Business Magazine | March 2019 12 BIG HITS Cannabis Firm Caliva Inks $75 Million Raise Caliva, a vertically integrated cannabis company based in California, closed its first round of funding, snagging $75 million the firm will use to expand its product offerings as well as its retail footprint in the Golden State. Former Yahoo CEO Carol Bartz and Pro Football Hall of Fame quarterback Joe Montana were among those participating in the funding. Bartz will serve on Caliva’s board. KushCo Raises $34 Million California-based KushCo Holdings, a diversified marijuana company specializing in packaging and other products and services, closed on a $34 million stock funding that comes on the heels of a similar direct offering last June. Massachusetts MMJ Provider Raises $12.5 Million Middlesex Integrative Medicine is joining forces with Full Moon Investments in a $12.5 million deal, through which the private fund will take an equity stake in the Boston-based provider of medical cannabis. The transaction provides Middlesex access to more capital to build out its cultivation and laboratory facilities as well as three planned dispensaries. Data Firm Headset Raises $12 Million; Canopy Takes a Stake Seattle-based marijuana data and analytics provider Headset raised $12.1 million for expansion, with Canadian marijuana giant Canopy Growth acquiring a key stake. Toronto-based Canopy Rivers, the venture-capital arm of Canopy Growth, invested $3.1 million in Headset preferred shares through a funding round led by San Francisco-based Poseidon Asset Management and AFI Capital Partners of Santa Monica, California. Headset CEO and co-founder Cy Scott told Bloomberg the funding round values Headset at roughly $30 million. That would put Canopy’s equity stake at about 10%. Number of Note: $9.3 million Massachusetts dispensaries rang up $9.3 million in recreational marijuana sales during the first four weeks of operation, an impressive feat considering only two stores were selling adult-use cannabis during the bulk of this period. Money Matters | Investing & Finance Insight What’s your top tip for best judging the credibility of valuations? Working with early stage businesses, it’s often difficult to arrive at accurate valuations because forecasts can be so variable. Most businesses in cannabis have parallels in more traditional industries, so we look to those as a comparative proxy to help benchmark valuations. We also try to develop an internal thesis around what the true possibility for the business is and look to any historical performance to substantiate the company’s traction. This is another place where we invest in the management team; if we feel like we can trust the forecast based on the team’s experience, it makes the valuation exercise a lot easier. What products or sector are you most excited about? We still think there is a lot of work to be done on the compliance front. This industry will continue to be highly regulated and complex as more states and international jurisdictions come online. The ability to manage that through technology is still a space we feel deserves more investment. We also see consumer brands as being an interesting segment. As the industry and consumer expectations begin to mature, brands will take on a larger role, with category winners able to ride industrywide growth. This interview has been edited for length and clarity.