NBA players, talent agents and Snoop Dogg's venture firm are among the investors behind LEUNE, a California cannabis brand eying new U.S. markets.
The company closed a $5 million round on Thursday from big name athletes like Carmelo Anthony, John Wall, Lebron James' agent Rich Paul and Anthony Saleh, who manages artists like Nas and Future.
Plus, it's backed by Snoop Dogg's Casa Verde Capital, a Los Angeles-based venture capital firm focused on seed investments for cannabis startups.
"I've been seeking to make an investment in the cannabis space for quite some time, but never found a brand that resonated with me until I came across Nidhi and her products," investor and celebrity La La Anthony said in a statement announcing the raise.
The company could not be immediately reached for comment.
The two-year-old startup sells cannabis products in over 130 California dispensaries and 19 delivery platforms. In a press release, founder and CEO Nidhi Lucky Handa said the funds will be used to contribute to hiring, growing LEUNE's product line and "unlocking more geographies." It's unclear where the company plans to launch next.
After becoming the first state to legalize medical cannabis use, California authorized recreational cannabis use in 2016. Last month, New York became the 15th state to legalize recreational marijuana, entering into what is becoming a crowded market.
Handa will also keep up her brand's commitment to social justice by working with The Last Prisoner Project, Eaze Momentum and the Floret Coalition — partnerships that include donations, mentorship opportunities and "awareness-building collaborations to amplify marginalized voices," LEUNE said in the statement.
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Dealmaking in the frenzied cannabis market continues to flourish with the latest megadeal announced Thursday. Investors aim to build a Coca-Cola or Hershey of marijuana, launching the first national pot brand in the United States.
Glass House Group, a vertically integrated California-based cannabis company, is being gobbled up by Mercer Park Brand Acquisition Corp., a Canadian SPAC —or Special Purpose Acquisition Company — for $576 million.
The combination will create the most expansive fully-integrated, publicly listed cannabis business in California, with plans to build a six million square foot greenhouse, the biggest in the state.
The deal comes after Century City-based Ceres Group Holdings announced a SPAC in February to take Atlanta-based cannabis producer Parallel public in a $1.88 billion transaction.
Related: What Is a SPAC?
Ceres has also been trying to close a separate deal to raise a $100 million fund to make other cannabis investments, especially those in Los Angeles.
The Ceres SPAC, like Mercer Park's, trades on Canadian exchanges because U.S. cannabis companies are still barred from listing their shares on major U.S. stock exchanges as marijuana is still illegal at the federal level.
But with President Biden taking over the White House, cannabis investors are optimistic he will ease restrictions, following the lead of many states.
Earlier this month, New York became the 15th state to legalize recreational marijuana.
The possibility of federal legalization as well as record amounts of blank check deals led to $600 million in capital raised for cannabis companies in the first quarter of 2021, the highest level since 2019, according to Viridian Capital Advisors.
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Behind California's lucrative marijuana businesses are the software companies keeping the books straight.
SaaS startups like Newport Beach-based Blaze run the iPads customers use to buy legal cannabis at stores in Venice as well as the delivery apps that help bring products straight to their doors.
And as more states pass marijuana legalization, delivery services, dispensaries and the companies that serve them are bracing for a new wave of business.
This week, the venture-backed company closed a $8 million Series A round, and plans to expand across the Midwest and East Coast.
The four-year-old company sells software and apps to over 300 legal cannabis companies in nine states, including California.
Delivery services such as L.A.-based Heyemjay have integrated the startup's API into their apps for drivers to facilitate drop-offs. The software handles compliance and logistics in each state, where strict, differing delivery requirements can slow down operations for small businesses.
Blaze's customers also include marijuana dispensaries, wholesalers and cultivators who pay a monthly or annual fee for the software.
"We track inventory. We track all their transactions, whether it be sales or invoicing and purchase orders," said co-founder and CEO Chris Violas, who raised a $1.5 million seed round in 2019.
The former Amazon Web Services account manager threw himself into studying the cannabis market during college, where he studied business and played Division 1 soccer until a series of injuries.
"In 2010, there was no legitimate delivery service that could bring cannabis to your doorfront in a proper way," said Violas.
He launched a small delivery service a year later — back when marijuana was legal for medical use only — and built Blaze as his senior thesis.
Violas thinks the cannabis retail tech industry has "reached a tipping point," with a handful of startups continuing to close splashy venture deals. New York-based LeafLogix — which Violas calls his biggest competitor — was acquired this month by cannabis ordering platform dutchie during a $200 million round that valued the Oregon-based company at $1.7 billion.
Blaze's boost in funding will help the 30-person team build out its tech products and expand into new states. The round was led by Delta Emerald Ventures with participation from Act One Ventures and SOJE Capital.
"We've got a big goal here," Violas said. "We want to bring canni-tech up to where the rest of the world is at with technology."
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