Renewed interest in financing cannabidiol (CBD) and cannabis businesses could signal that investors are starting to feel positive again about the future after companies seemingly weathered the worst of the storm in 2020.
HempFusion Wellness began the year with the optimistic gesture of commencing trading on the Toronto Stock Exchange on January 6th, completing its initial public offering of 7m common shares for USD $7m.
“The additional USD $17m in capital adds to our healthy treasury, providing us with a solid foundation to build from and execute on our strategic plans for 2021 and beyond,” said HempFusion CEO Jason Mitchell.
“Our goals include increased investment into research and development, expanding our sales and distribution networks, and firmly establishing HempFusion as a leader in the dynamic global CBD industry.”
The firm’s offerings include HempFusion-owned Biome Labs, HF Labs, and Probulin Probiotics, for which it has just launched an Amazon e-commerce store to expand its distribution, drive online growth, and increase brand awareness.
“We are incredibly excited to launch The Probulin Store on Amazon, which provides our brand with tremendous exposure to new customers,” said Mitchell.
Probulin itself is a non-CBD product; Amazon still maintains a ban on CBD products, other than its ongoing limited trial in the UK.
HempFusion’s topical CBD products include creams and balms that target acne, anti-aging, sports pain relief, eczema relief, and wound care.
Meanwhile, another special purpose acquisition company (SPAC) has expressed interest in hemp and CBD. Ackrell SPAC partners, newly formed at the end of last year, will invest up to $100m in fast-moving consumer goods including hemp–particularly in beverage and wellness products.
“Our management team believes that hemp-based consumer goods have the potential for mass consumer appeal around the world,” the company said. “Consumers are beginning to use hemp-based products to treat a variety of medical conditions, including anxiety, insomnia, pain, and inflammation.”
Further positive news for the industry comes in the form of musician-related investments. Subversive Capital Acquisition, another SPAC–this time in the cannabis space–hired Jay Z to “foster social equity” in the industry. It has already purchased two companies–Caliva, a cannabis brand, and Left Coast Ventures, an investment firm and producer, and is looking for more targets.
Meanwhile Snoop Dogg’s venture capital firm Casa Verde has raised $100m for its investment fund Casa Verde Capital, according to documents filed with the US Securities and Exchange Commission.
The fund’s managing director, Karan Wadhera, predicts that the cannabis industry will benefit from an increased drive towards legalization.
“Sitting here today, four-plus months into COVID, cannabis has really proven itself to be a non-cyclical industry,” Wadhera told TechCrunch in July 2019. “Cannabis has been deemed an essential business everywhere across the US. We had record sales in March, April, and May, and the trend has continued.
“And now that we are getting into an environment where governments are going to be looking for additional sources of tax revenue, the potential urgency around cannabis legalization is going to be there, which is going to be massively positive for the industry.”
There’s no indication of the target for the new venture capital fund but the fundraising has more than doubled Casa Verde’s initial investment vehicle.
Similarly, Aurora Cannabis announced it had raised around $125m through the sale of 12m shares at a price of $10.45 per unit. The money will be used for general corporate purposes, including potentially reducing debt.
In related psychedelic fields, Berlin-based biotech company Atai Life Sciences also raised $125m last year when it closed a round of Series C funding. Apeiron Investment Group, as well as Catalio Capital Management and billionaire Peter Thiel, co-founder of PayPal and the first outside investor in Facebook, led the round.
“Proceeds from the financing will be used primarily to fund pre-clinical and clinical development of Atai’s existing mental health programs, to expand its drug candidate pipeline, and further advance Atai’s platform technologies,” said the firm, which is developing treatments for mental health issues.
“We believe that our psychedelic and non-psychedelic compounds have compelling therapeutic promise, based upon a growing body of scientific evidence. This round of funding is another step towards our vision to effectively treat and ultimately prevent mental health disorders, bridging the gap between what the mental health system currently provides and what patients need,” said Florian Brand, CEO and co-founder of Atai Life Sciences.
Atai chairman Christian Angermayer added, “With COVID-19 only accentuating the failures of existing standards of care, we are at an inflection point when it comes to seriously addressing this global mental health crisis.”
Image Credit: Nattanan Kanchanaprat
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