This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.
- Business Insider identified the cannabis startups that closed the biggest funding rounds this year.
- The eight companies on our list collectively raised more than $253 million in 2020.
- They range from private multi-state operators like Ascend Wellness Holdings, which raised $68.2 million in August, to tech startups, like LeafLink, which closed a $40 million Series C in December.
- This year, cannabis startups accounted for a smaller portion of total investment into the cannabis industry compared to their public counterparts.
- Subscribe to Insider Cannabis for more stories like this.
From startups to publicly traded companies with multibillion-dollar market values, 2020 was a year of belt-tightening for most cannabis companies as capital dried up before (and during) the pandemic.
But there were still deals on the table, especially for startups with growth potential. There was a significant uptick in VC interest in cannabis startups, particularly on the software side, around August.
That month alone, two startups that made our list, Dutchie and Fyllo, closed significant rounds, and Springbig closed an $11.5 million Series A round (we cut our list off at $15 million). That quarter, venture investors poured over $57 million into cannabis startups, providing a much-needed boost to the sector.
Still, public cannabis companies accounted for a much larger chunk of capital raises this year, according to cannabis advisory firm Viridian Capital Advisors. Public companies made up 82% of all capital raises so far this year, compared to 64% in the same period in 2019, per Viridian.
Cannabis startups accounted for 20% of the total dollars raised in the industry in 2020, down from 31% last year. Still, the eight companies 0n our list raised more than $253 million.
Read more: Venture investors are piling into red-hot cannabis tech startups, despite the industry’s struggles. Here’s why mainstream funds are betting on software over pre-rolls.
The startups on our list range from private multi-state operators like Ascend Wellness Holdings, which closed a $68.2 million raise in August, to cannabis tech startups, like LeafLink, which closed a $40 million Series C funding round in December.
Most cannabis-focused investors told Business Insider that they’re shifting their investment dollars from early-stage firms to growth-stage companies that already have a proven track record, though many said that they are still open to exceptional newer companies.
Challenges remain for mainstream venture funds looking to bet on cannabis legalization. A few mainstream funds, like Thrive Capital and Founders Fund, have invested in cannabis software companies. But most funds are barred by their investors — who may be pension funds associated with religious groups, or foreign sovereign wealth funds from conservative Middle Eastern countries — from doing deals in cannabis or any other “vice industry,” as we outlined in a deep-dive story last year.
To put together this list, Business Insider asked private market data provider PitchBook for cannabis startups that closed the biggest funding rounds from investors in 2020. We then reached out to each company on our list to confirm the numbers, though some declined to disclose the details we asked for. We focused on equity investments, not debt.
Here are the eight cannabis startups that raised the most money in 2020:
Ascend Wellness Holdings — $68.2 million
Located: New York, New York
Post-money valuation: N/A
Biggest funding round of 2020: $68.2 million, closed in August.
Total raised to date: $208.63 million, according to PitchBook. Ascend declined to disclose a figure.
What the company does: Ascend currently sells cannabis in Illinois, Michigan, Massachusetts, New Jersey, and Ohio. The company said in an email to Business Insider that it focuses on limited-license states east of the Rockies, “with flagship locations in desirable retail corridors serving key medical and adult-use markets.”
Goals for 2021: Ascend Wellness Holdings declined to comment for this article. Some analysts have speculated that the company is mulling an IPO or another pathway to the public markets next year.
Dutchie — $35 million
Located: Bend, Oregon
Post-money valuation: $205 million, according to PitchBook. Dutchie declined to disclose a figure.
Biggest funding round of 2020: $35 million closed in August 2020. Read Business Insider’s coverage of the round here, and see the pitch deck Dutchie used to raise the funds.
Total raised to date: $53 million, according to Dutchie.
Goals for 2021: Dutchie told Business Insider it’s aiming to “define the modern cannabis consumer experience” in the coming year. The company says it will continue to provide online shopping solutions for dispensaries of all sizes.
Front Range Biosciences — $31 million
Located: Boulder, Colorado
Post-money valuation: This figure will be available when the company’s series B round is fully closed, Front Range Biosciences told Business Insider.
Biggest funding round of 2020: $31 million in a Series B round, closed in August 2020. The company told Business Insider there is up to $7 million of additional room available in the current round.
Total raised to date: $45 million, according to Front Range Biosciences.
Goals for 2021: The company says in 2021, it will bring a variety of offerings to the market, including high potency THCV, CBG, CBDV, CBC, and other cannabinoids.
Fyllo — $26 million
Located: Chicago, Illinois
Post-money valuation: N/A
Biggest funding round of 2020: $26 million closed in August 2020. Read Business Insider’s coverage of the round here, where we get an exclusive look at the pitch deck Fyllo used to close the round.
Total raised to date: $26 million, according to Fyllo.
What the company does: Fyllo is a data and compliance software startup for the cannabis industry.
The company says its advanced data, media, and compliance solutions are built for the complex regulatory structures that surround the cannabis industry, which vary from state to state.
Goals for 2021: In August, when Fyllo closed its $26 million round, CEO Chad Bronstein told Business Insider that looking forward, the company eventually hopes to broaden its scope to other highly-regulated industries, like E-sports and online gambling.
“Our TAM [total addressable market] is very sizable because we built a data ecosystem that mainstream brands could target,” Bronstein said in an August phone interview with BI. “You could be a Fortune 100 brand wanting to be able to target a cannabis consumer. You may not want to say it, you may not be running cannabis ads per se, but you can want to target that consumer because that consumer is very much a consumer of other products or have other behavioral traits the company wants to target.”
Greenbits —$23 million
Located: San Jose, California (HQ), Portland, Oregon
Post-money valuation: $58 million according to PitchBook. Greenbits declined to disclose a figure.
Biggest funding round of 2020: $23 million closed in April 2020
Total raised to date: $47.2 million, according to Greenbits
What the company does: Greenbits is a retail technology company focused on the cannabis industry. It works with more than 1,200 cannabis retailers across 13 states to automate state-by-state compliance, point of sale, inventory control, and personalized insights.
Greenbits says it processes $4 billion in regulated cannabis sales annually on its platform.
Goals for 2021: Greenbits told Business Insider in an email that it is in “its next phase of growth,” for this coming year, where it will aim to accelerate product development for cannabis retailers while expanding service offerings to new geographic markets throughout North America.
Read Business Insider’s scoop on Barry Saik taking over as CEO in December.
Kadenwood — $15 million
Located: Newport Beach, California
Post-money valuation: $85 million, according to the company. Kadenwood told Business Insider it’s currently raising a Series B round at a $250 million valuation.
Biggest funding round of 2020: $15 million closed in January 2020
Total raised to date: Over $24 million, according to Kadenwood
What the company does: Kadenwood is a privately held consumer products company “focused on shaping CBD into a trusted and safe mainstream wellness category.”
Kadenwood says that to accomplish this mission, it’s leveraged decades of CPG marketing and category innovation expertise, as well as created what it says is the largest vertically-integrated CBD production operation in the US through its acquisition of EcoGen Biosciences in August of this year.
The company launched its first branded products under LEVEL SELECT in personal care in 2019, and expanded into the supplement and pet care markets in 2020.
Goals for 2021: “Despite the challenges of 2020, we grew our company into the largest seed-to-self operation in the US, created new specialty divisions, led the industry in consumer advertising and launched first-to-market category products, all with an approach focused on innovation and science,” Erick Dickens, CEO & and cofounder of Kadenwood told Business Insider in an email.
Dosist — $15 million
Located: Santa Monica, California
Post-money valuation: N/A
Biggest funding round of 2020: $15 million closed in October 2020 from Turning Point Brands, which made a strategic investment into Dosist. TPB has the option to invest another $15 million at pre-determined terms by October 2021.
Total raised to date: N/A
What the company does: Dosist is a startup best known for its line of cannabis vape pens as well as other cannabis and wellness products that have different formulations and potencies. Its offerings range include vape pens branded as “calm,” or “relief,” and other categories.
Goals for 2021: Dosist declined to comment for this article.