December 1, 2021 Hey everyone, In today’s edition of the Green Paper: We are breaking down the consolidation of cannabis companies in California, Headsets recent raise & Jamaica’s new cannabis education campaign. Consolidation In CaliforniaBreaking down the consolidation of cannabis companies in California... The state of California is the largest cannabis market in the world. Home to 39 million people, California was the first state to legalize medical cannabis back in 1996 & in 2018 California legalized adult-use cannabis. Despite the ever-increasing demand for legal cannabis in the region, legal cannabis companies are struggling to remain independent in California. The consolidation…This week, Harborside announced its plans to acquire both Urbn Leaf, a successful cannabis retailer, and Loudpack, a successful brand. This follows its acquisition of Sublime, another successful brand which they acquired for $43.8 Million USD in June. This recent wave of consolidation makes Harborside one of the largest cannabis companies in California, however, they are by no means alone in seeking to consolidate cannabis companies across California. Late last year Caliva joined forces with Shawn “Jay-Z” Carter & Left Coast Ventures to create The Parent Company which is also one of the largest cannabis companies in California. The Parent company has continued to consolidate cannabis companies in California — acquiring West Hollywood Dispensary in June, Jayden’s Journey Dispensary in August, and Coastal in October. Why is this happening?To answer this question, we reached out to Taylor Jones, co-founder & V.P of Revenue at Pistil Data, a business intelligence platform that works with many of the top cannabis brands in California today. Here’s what Taylor had to say: "It’s extremely difficult to win in the California cannabis market today without reaching a certain scale due to over regulation & over taxation of cannabis. Brands underestimate the difficulty of getting on cannabis retailers’ shelves and remaining on cannabis retailers’ shelves. Struggling companies have limited options:
D2C models and delivery options may help, however, the issue remains that there are only 868 cannabis stores open in a state home to 39+ million people.
For reference, Colorado has 574 cannabis retail stores to service the 5.7 million people living in the state.
Looking forward…The legal industry has been gaining ground on the illicit market of late, however, with close to 68% of California cities banning cannabis retail stores — cannabis companies continue to face an uphill battle. Our TakeWe will continue to see more consolation in California as a consequence of the lack of capital available to smaller cannabis companies in the state. Should federal legalization occur, it would serve as a much-needed lifeline for independent cannabis companies, however, until such legislation is passed many cannabis companies in California will have no choice but to merge. Headsets' Recent RaiseBreaking down the cannabis data company’s recent raise... Founded in June 2015 — cannabis data startup Headset has announced it has closed another round of fundraising. With an additional $3 million USD from Althea, Headset has now raised $8.6 million USD since August 2020 and $24.1 million USD since its inception. From Leafly to Headset…The founders of Headset are far from strangers to the cannabis industry. In June 2010, the 3 co-founders of Headset; Scott Vickers (CTO), Brian Wansolich (CPO), and Cy Scott (CEO) co-founded the cannabis marketplace Leafly — a company now valued in excess of $500 million USD. Less than 2 years after they began building the company, Leafly was acquired by the cannabis private equity firm Privateer Holdings for an undisclosed sum. The 3 co-founders remained with the company until 2015, when they decided it was time to build their next solution to help the cannabis industry.
The demand for data…The cannabis industry was once primarily comprised of mom & pop operators, however, the industry has experienced a significant transformation in recent years and the demand for data-driven solutions has never been higher. By aggregating cannabis retailers point of sale data, Headset provides the cannabis industry with insights to help: → Brands create the right products. → Retailers stock the right products. → Investors allocate capital to the right companies. Looking forward…Headset has done a fantastic job developing its platform, however, with the rising demand for data-driven solutions in the cannabis industry, Headset isn’t the only company providing companies with access to insights. In November, startup Pistil Data announced its $6.5 million USD seed round from Snoop Doggs venture capital firm Casa Verde. Our TakeWhereas once the cannabis industry had to rely on instincts to make the right decisions, the industry has now reached a point where many software companies are being built to specially service the cannabis industry. With global cannabis sales on track to exceed $31 billion in 2021 — it’s a great time to build a cannabis software company as we are seeing with Headset, Pistil Data, Flowhub, Fyllo & Dutchie who have all recently raised new rounds. Jamaica’s New Cannabis Education CampaignBreaking down Jamaica’s brand new cannabis education program… There are very few people in history more closely associated with cannabis than music icon Bob Marley. Born in Jamaica in 1963, Bob Marley’s home nation has launched now launched a campaign that aims to promote public education around cannabis. The campaign…To educate its citizens on cannabis, the government of Jamaica has created a new website that provides resources and articles on the health impacts and benefits of consuming cannabis. The Ministry of Health and Wellness officially rolled out the site on Monday.
Misinformation…Jamaica aims to have “an overall evidence-based dialogue that can change the attitudes and behaviors that Jamaicans hold towards ganja.” The website takes aim at a number of key points that are often raised to support cannabis remaining illegal.
The new website addresses each of these myths — one by one. Looking forward...This is the first time we have seen a government take such a modern approach to support cannabis education as opposed to promoting misinformation. This approach is in sharp contrast to what we have seen in Canada where regulators focus on promoting the dangers of cannabis. Many criticized this approach at the time, and when compared to the approach Jamaica has adopted — it's clear Canada has some catching up to do. Our TakeI love this new approach & the website they have built looks amazing. We need to see more nations around the world following the actions Jamaica has taken to educate its citizens on what we actually know about cannabis. Today's Cannabis Jobs
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