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Welcome to Insider Cannabis, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.
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Hello everyone,
This week, the House Judiciary Committee passed the MORE Act, a bill that would federally decriminalize cannabis, on Thursday by a vote of 26-15, mostly along party lines.
In other news, Aurora Cannabis CEO Miguel Martin told us he thinks the cannabis industry and its investors are too focused on US recreational consumers and are missing a more profitable opportunity: medical marijuana.
"The fact that everyone is just so consumed by this idea that only rec cannabis matters, I think, is a fallacy," Martin said in a recent interview. Aurora's medical-cannabis business is a bright spot for the company. Medical sales increased 9% in the most recent quarter, while the company's recreational sales tumbled 45%.
In other news, Insider's cannabis team was at the Business of Cannabis conference in New York this week, where Jeremy moderated a panel on how the New York market would shape out as the industry begins to ramp up. We'll be at a few others in the coming months, so feel free to say hello if you see us around.
- Jeremy Berke (@jfberke) & Yeji Jesse Lee (@jesse_yeji)
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Here's what we wrote about this week:
Rootz Research claims it's using insights from top Wharton professors to upend cannabis data. The real story is far more complicated.
The founder of Rootz Research told Insider he started the company with three Wharton professors. One of the professors told Insider the founder, Eric Spitz, had "grossly misrepresented" his role. The cannabis industry has its share of disingenuous founders and startup failures. Can Rootz chart a different path?
3 top VCs who've sunk the most cash into psychedelics say they prioritize data, deep expertise, and a clear market strategy when placing their bets
The top 3 VCs in the psychedelics space told Insider they'd seen hundreds of pitches from startups since early 2020. So we asked them two main questions: What makes a company stands out? What's an automatic red flag?
A top psychedelics VC who's evaluated 374 pitches shares the 2 red flags that turn him off every time
Sa'ad Shah, managing partner at the Noetic Fund, told Insider in a recent interview that he's seen 374 different pitches from startups in the industry and that there are two major red flags he sees among companies in the space, which signal to him that he shouldn't invest.
Aurora Cannabis is betting on medical marijuana, not the 'fallacy' of recreational pot. Here's why.
Aurora Cannabis is doubling down on its medical business, CEO Miguel Martin told Insider. Aurora's medical-cannabis business is a bright spot for the company. Medical sales increased 9% in the most recent quarter, while the company's recreational sales tumbled 45%.
Executive moves
- US cannabis company MariMed said on Monday that former Neptune Wellness executive Steve West would be joining the company as vice president of investor relations.
- Cannabis tech company Flowhub announced on Wednesday that former Uber general manager Leandre Johns would be joining as chief operating officer.
- Cannabis website Leafly said on Tuesday that finance and tech veteran Suresh Krishnaswamy would be joining the company as its new chief financial officer.
- California-based cannabis company Glass House Brands announced on Wednesday that it had appointed finance and accounting veteran Mark Vendetti as its new chief financial officer.
Deals, launches, and IPOs
- Trulieve closed its blockbuster deal with Harvest Health & Recreation. Trulieve also raised a $350 million private placement, at an 8% interest rate.
- Psychedelics company Delix Therapeutics said on Monday that it had raised $70 million in a Series A round led by ARTIS Ventures, RA Capital Management, and OMX Ventures.
- US cannabis company Jushi Holdings announced on Wednesday that it would be acquiring Nevada-based cannabis dispensary The Apothecarium.
- Parallel, Beau Wrigley's cannabis company, is no longer going public after the deal with Ceres Acquisition Corp, a SPAC, fell apart.
- Former basketball star Chris Webber and his business partner Lavetta Willis are building out a $50 million cannabis facility in Detroit, reports The Detroit News.
Policy moves
- The House Judiciary Committee passed The MORE Act, a bill that would federally decriminalize cannabis, on Thursday by a vote of 26-15, mostly along party lines.
- US cannabis company Ascend Wellness Holdings said on Monday that it had reached its $1 million milestone in contributions to the Last Prisoner Project, a non-profit focused on advocacy for individuals with cannabis convictions.
Research and data
- A new study in the journal Drug and Alcohol Dependence found that more cannabis stores led to more legal sales - without increasing the number of new users. "That's about the best policymakers could have hoped for," the study's author, Brock University professor Michael Armstrong told Insider.
- A new study in the Journal of the American Medical Association found that with legalization, Hispanic and White individuals increased their marijuana usage while Black individuals did not.
- A new study from New Brunswick's Research and Productivity Council found that illicit cannabis is more likely to contain contaminants like microbes and pesticides, and have inaccurate label claims when compared to legally purchased cannabis.
- Cannabis-related arrests in the US saw a steep drop in 2020, according to new data from the US Federal Bureau of Investigation, which showed that arrest rates dropped 36% in 2020 compared to 2019. Read more at NORML.
Cannabis jobs
- Fintech company FIS is hiring a senior strategy advisor to work on cannabis and CBD payments.
Earnings
- Aurora Cannabis released its fiscal Q4 results on Monday, reporting C$54.8 million in revenue, and a net loss of C$134 million.
What we're reading
Selling Marijuana on Tribal Lands, a Legal Gray Area (New York Times)
Greener pastures: Marijuana jobs are becoming a refuge for retail and restaurant workers (The Washington Post)
Cannabis industry jobs are on the rise, fueled by the Great Resignation (Insider)
Is It Ever OK to Get Stoned With a Client? And Other Questions as Pot Comes to Work (The Washington Post)