Welcome to Cultivated, our weekly newsletter where we’re bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.
Happy Friday everybody!
I hope everyone enjoyed the shortened week.
I’ll keep it quick: we’ve got some great stories on tap for you in this edition. First, I interviewed Richard Acosta, the CEO of the newest cannabis REIT.
My colleague Yeji took a deep dive into CBN, which could be the next trendy cannabinoid after CBD. And we also have a look at the fascinating world of cannabis influencers, who draw in both huge traffic and the ire of the social platforms they use.
Here’s what we wrote about this week:
A group of cannabis investors just raised $225 million to buy up real estate in a tough market. Here’s how they put the deal together.
Subversive Real Estate Acquisition REIT LP is the newest cannabis-focused real estate investment vehicle in town.
SPACs are an increasingly common structure used to invest in cannabis companies because most traditional investors — like pension-backed hedge funds or private equity firms — are reticent to get involved in the industry, since cannabis is federally illegal in the US.
The fund’s CEO, Richard Acosta, told Business Insider that they raised $225 million over a two-week period in December through a SPAC, or special purpose acquisition vehicle.
There’s a hot new cannabis compound that claims it’ll help you sleep better. Meet CBN, which is chasing a $1 billion-plus market.
Get ready for the next trendy cannabis-linked wellness compound.
Cannabis companies are gearing up to launch products containing cannabinol, or CBN, claiming they can help people sleep better. The market for CBN could be significant. Millions of Americans have trouble sleeping, and some already turn to CBD or melatonin for help.
Inside the world of cannabis influencers on Instagram and YouTube, who can make over $1,000 for a sponsored post but often get their accounts shut down
Instagram and YouTube are still determining how to moderate cannabis content at a time when their users live across state and national borders where marijuana is subject to a wide variety of laws and regulations.
“It started with pictures and taking bong rips,” cannabis influencer Anjela G. said. “I really just found a way to connect with so many people all over the world.”
Anjela’s cannabis-centered brand, Koala Puffs, has over 900,000 followers across Instagram, YouTube, Snapchat, and Twitter. Because her content is all about using cannabis, a federally classified Schedule I drug in the US, her accounts are in a tenuous position on social platforms like Instagram and YouTube.
Capital raises, M&A activity, partnerships, and launches
- Aurora Cannabis spinoff Australis Capital terminated its agreement to merge with Folium Biosciences, a CBD company, after the company said it discovered “new relevant information with regard to Folium.” The deal was first announced in December.
- A group of Canadian cannabis industry alums has launched Alan Aldous, a PR agency focused on the emerging psychedelic space. The name is a “nod to two highly inquisitive famous authors, Alan Watts and Aldous Huxley,” the company said in a release.
- Cannabis real estate fund NewLake Capital acquired ten properties in six states for a $15.5 million price tag. Six of the ten properties are part of a sale-leaseback transaction with Grassroots Cannabis.
- High Times has received a symbol and approval from FINRA to begin trading, culminating the decades-old company’s Regulation A+ campaign. Adam Levin, High Times’ executive chairman, said the listing will help “assist us in furthering our acquisitional goals.” The release did not give a specific trading date.
- Embattled Canadian cannabis producer CannTrust has appointed Greg Guyatt as CEO. Guyatt takes over from Robert Marcovitch, the company’s interim CEO, who was appointed after Peter Aceto left the company in the wake of an unlicensed growing scandal. Guyatt was previously CannTrust’s COO.
- TILT Holdings has appointed Mark Scatterday, the company’s interim CEO, as full-time CEO. Tim Conder will become President and COO.
Chart of the week
In the US, Colorado spent the most on cannabis per capita in 2019, at an average of $268 per person, followed closely by Nevada ($242) and Alaska ($192). Interestingly, some states on this list with only medical programs — like Montana, Arizona, Oklahoma, and Rhode Island — are outpacing some states with full legalization in terms of spending per capita:
Shayanne Gal/Business Insider
What we’re reading
Wine vs. weed in Napa Valley (Politico)
Pay to play: Cannabis brands fork over cash for retail shelf space (Marijuana Business Daily)