Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 18 It’s almost too late to launch small in the ancillary sector. A handful of players already dominate cannabis tech and cannabis media nationally, for example. But the opportunity is still high and still emerging from state to state for consumer (flower, concentrates, edibles, topicals, etc.) brands. Why is it that private equity/venture capital tends not to invest as much in minority-owned businesses? Is this changing? First, VCs and equity firms are relationship- and network- driven. Entrepreneurs of color often lack access to the informal networks that are critical for attracting venture capitalists. When do VCs take meetings with businesses that come with no recommendation from anyone in their network? And, yet, most entrepreneurs of color don’t have anyone in their network with connections to private equity firms, family offices, etc. Second, like funds like. In a Harvard-conducted brain-scan study, the researchers looked at how bias impacts hiring practices, relationships and more, and (they) determined you subconsciously look for points of similarity in everyone you meet because similarities make you feel safer. There is unconscious bias operating for investors when assessing businesses owned by people of color, BIG HITS Subversive Capital Raises $575 Million New York-based Subversive Capital closed a $575 million raise. Subversive formed a special purpose acquisition company (SPAC) through the raise with eventual plans to invest in the cannabis industry. SPACs are increasingly popular as a means of raising money for future investment in cannabis, particularly on the NEO exchange in Canada. Harvest Health & Recreation Secures $225 Million Loan Harvest Health & Recreation, a Phoenix-based multistate cannabis operator, secured a loan of up to $225 million to help accelerate growth. The loan, to be structured in three $75 million tranches, is backed by Miami-based Torian Capital Partners and will be used for working capital, strategic acquisitions and general corporate purposes. Demetrix Raises $50 Million in Series A Funding Emeryville, California-based Demetrix secured $50 million in a Series A funding, which the company plans to use for research of synthetic cannabinoid production. The funding round was led by New York-based investment group Tuatara Capital with support from an existing investor, Horizons Ventures of Hong Kong. The company wants to use baker’s yeast to produce large volumes of cannabinoids. Sol Global Raises $37.5 Million in Debt Financing Sol Global, a Toronto-based international cannabis investment firm, said it raised $37.5 million (CA$50 million) in debt financing. The company will use the proceeds to fund the expansion of CBD operations in California, Florida and Michigan. Origin House Closes $9 Million Debt Raise Origin House, a Canadian cannabis delivery company due to be acquired by Cresco Labs, closed a debt raise of $9 million (CA$12 million) with the Manitoba, Canada-based Opaskwayak Cree Nation. Ontario-based Origin House received a second tranche of $6.4 million (CA$8.5 million) in July, with proceeds expected to be used for expansion of cannabis facilities in Sonoma County, California. Arcview Raises $7.7 Million in Series A Funding The Arcview Group, a well-established Oakland, California-based cannabis investment company, raised $7.7 million in a Series A funding in a move seen as a takeover by institutional investors, largely Trivergance of New Jersey. Cresco Capital Partners of Dallas also backed the funding. Money Matters | Nick Thomas