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Wu-Tang Clan rapper Method Man recently launched a cannabis brand, "Taking Into Consideration All Lives," that will highlight racial injustice..
Former Disney star Bella Thorne has a brand called Forbidden Flowers that she will use to talk about the flower's healing powers, the original puffer Snoop Dogg has partnerships with Canopy Growth and billionaire rap mogul Jay-Z became the chief strategist for Caliva last year giving the brand an edge.
Celebrities are cashing in big on California's green rush and putting their own signature on it.
Shavo Odadjian, bassist for L.A. metal giants System of a Down is trimmed from the same mold. His 2018 startup, 22Red, celebrates creative minds and has a music production wing. He sees 22Red not just as a purveyor of cannabis, but of music, art and fashion. And it's just getting started.
"It's not just about getting high," Odadjian tells dot.LA at 22Red's minimalist headquarters, where glass garage windows and French doors separate conference rooms, offices and studios — far removed from its prior calling as a place of worship in downtown Pasadena.
Shavo Odadjian, bassist for L.A. metal band System of a Down's cannabis startup, 22Red, celebrates creative minds and has a music production wing.
The company is working with HEX, a boutique accessories designer with a flagship store in downtown Los Angeles, to launch backpacks, bags and other products.
Each run is limited and marketed as exclusive with high quality stitching and material. "We're going to do custom stuff," Odadjian says. "I don't like too much branding."
Another collaboration is in the works with renowned L.A. tattoo artist Chuey Quintanar, whose realistic inks have been featured in museum exhibits. Quinatar, a master of the black and gray style that has roots in Chicano culture, is now vaunted by celebrities and high-end tattoo shops.
"What I believed in was creating a whole lifestyle brand that is beyond cannabis," says 22Red chief executive Harry Kazazian, who joined the company about a year ago. "It's bigger than Shavo. It's more about the arts, socializing and enjoying life."
Kazazian, a fellow Armenian who played in heavy metal bands, has known Odadjian for more than 25 years, travelling in many of the same circles. He was an early seed investor who helped the brand raise more than $1 million from friends and family.
"I've always looked up to Harry. He's an amazing person and a kind soul," Odadjian says of Kazazian.
"I needed someone that I could trust."
Kazazian brings not only a track record in outdoor sports and consumer goods to the operation, but deep knowledge of distribution and supply chains that can be leveraged. One of the company's brands, Hex, is producing 22Red gear. Kazazian co-founded Colorado-based Exxel Outdoors more than 20 years ago and remains the CEO as the company has grown. He wants to create a similar path for 22Red.
"My goal has been more about building a solid business foundation," Kazazian says of his new role. "My management style is more about longevity."
The brand is personal to Odadjian. He wants to build 22Red up in the very neighborhoods where he grew up and where System of a Down grew its audience in the '80s.
22Red launched in November at cannabis retailers, including Dr. Greenthumb's in Sylmar and City Compassionate Caregivers downtown. A small run of hoodies and t-shirts were produced at business partner Mike Basteguin's factory in Hollywood.
Odadjian attended the Rose and Alex Pilibos Armenian School in East Hollywood, along with System band mates Serj Tankian (lead vocals, keyboards) and Daron Malakian (vocals, guitar), though at different times.
"It was the hood. That's where I saw poverty, that's where I saw hookers, that's where I saw gangs, that's where I saw drugs," says Odadjian in a cadence as frenetic as his bass guitar. "I would go to sleep with the sound of helicopters, ambulances and police."
Drummer John Dolmayan's family was also part of that mass migration in the 1970s and 1980s to Armenian enclaves in Los Angeles, particularly Hollywood, the San Fernando Valley and Glendale, where the band ultimately formed.
"I could have gotten into anything. I could have been a gangbanger. I could have gotten into drugs. I could have died," Odadjian says. "I chose skateboarding and guitar."
When creating the brand, he drew inspiration from his life. Born on April 22 and married on May 22, he was 22 when System signed with American Recordings. His first two sons were also born two years, and 22 days apart.
The number resonated deeply with him. Twenty-two led to the color red.
Odadjian has synesthesia, a neurological condition that causes him to see colors with numbers, letters and even music.
"It's an association thing, and I associate things with color," Odadjian says, which causes the brain to process data through several senses at once.
22Red fit together in his mind.
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Electric vehicle hopeful Faraday Future has had no shortage of drama—from alleged securities law violations to boardroom shake-ups—on its long and circuitous path to actually producing a car. And though the Gardena-based company looked to have turned a corner by recently announcing plans to launch its first vehicle later this year, Faraday’s quarterly earnings report this week revealed that demand for that car has underwhelmed—to say the least.
Among the business updates and organizational changes disclosed in its first-quarter earnings release on Monday, the company tucked in one startling number: 401. That’s the number of paid pre-orders that Faraday said it had received for its first production vehicle, the FF 91, as of March 31.
The paltry number is especially interesting given the context of the automaker’s rocky history. Earlier this year, the publicly traded company found itself in hot water with the Securities and Exchange Commission, which is now investigating allegedly inaccurate and misleading statements made by Faraday to investors. Those statements, according to an internal review by the company, include misrepresenting how many pre-orders it had received for the FF 91: Originally, Faraday reported more than 14,000 reservations on its books, but it later emerged that an overwhelming bulk of those pre-orders were unpaid—with only a few hundred actual, paid deposits on the vehicles. (What’s more, nearly 80% of those pre-orders were allegedly from a single, undisclosed company that may have been an affiliate of Faraday’s, according to a blistering report by short-selling firm J Capital.)
Faraday’s earnings report also highlighted first-quarter developments including leadership moves, production partnerships and its unveiling of the first production-intent FF 91. The company noted that it had received a dealer and distributor license from the state of California that should allow Faraday to sell vehicles online anywhere in the U.S. It also signed a lease for a showroom in Beverly Hills, and is currently on the search for a second such location in the U.S. Additionally, Faraday Future’s second car, the FF 81, will be produced in South Korea in partnership with auto manufacturer Myoung Shin, with production slated to begin in 2024.
In terms of financials, Faraday reported an operating loss of approximately $149 million in the first quarter—up from a loss of $19 million in the same period last year. The company has $706 million in total assets on its balance sheet, including $276 million in cash. Faraday’s stock closed Wednesday’s trading at $3 per share—down roughly 50% since the start of this year.
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This January, John McElhone moved to Santa Monica from, as he described it, “a tiny farm in the absolute middle of nowhere” in his native Northern Ireland, with the goal of growing the crop-monitoring tech startup he founded.
It looks like McElhone’s big move is beginning to pay off: His company, CropSafe, announced a $3 million seed funding round on Tuesday that will help it develop and scale its remote crop-monitoring capabilities for farmers. Venture firm Elefund led the round and was joined by investors Foundation Capital, Global Founders Capital, V1.VC and Great Oaks Capital, as well as angel investors Cory Levy, Josh Browder and Charlie Songhurst. The capital will go toward growing CropSafe’s six-person engineering team and building up its new U.S. headquarters in Santa Monica.
The nascent agtech company began in 2019 as a project between McElhone and his co-founder and high school classmate, Micheál McLaughlin. Growing up in the Northern Irish countryside, the pair developed an interest in technology, which led to ideas about how such technology could aid the agricultural communities they were raised around.
“We noticed that there was a lot of really new, cool technology coming into the farming market at the time,” McElhone told dot.LA. “But every single farmer in our area hadn't a clue how to get started with all this new fancy technology, because they would have to go to training sessions or learn how satellite imagery from NASA works. And farmers—their job is to farm, not to interpret data.”
The first version of CropSafe’s software aimed to bridge that gap. At its core, the platform is an interpretation engine that scrapes and parses through troves of weather data and satellite imagery to find the information that farmers need to grow and harvest more effectively. “CropSafe did that work for you and spots useful nuggets like, ‘Hey, there's blight in field no. 14; here's the exact location and what you need to do next,’” McElhone explained.
But the project, which began simply as a tool for friends and family in Northern Ireland, started drawing attention from users around the world; to the founders’ surprise, people began offering to pay for the service. “That was kind of a turning point—realizing it wasn't just our 200 people that wanted to use it,” McElhone said. So he packed his bags and moved to Southern California at the start of this year to try to build out the software in one of agtech’s hottest markets.
McElhone and McLaughlin now believe there’s a better way forward that would position CropSafe as more akin to a fintech platform for farmers: Because the software collects so much data on farms, it can offer insights into removing bottlenecks that farmers could leverage to secure crucial financing for equipment and other needs.
“If a farm is leasing three combines this year, with the data we have on that farm [and its] crops, we might be able to say: ‘Hey, if you lease an additional combine this year, we know that you will produce so-and-so additional yield and produce $25,000,’” according to McElhone. In an ideal scenario, CropSafe could allow the financing for that combine to be approved instantly on the strength of the data on its platform; the farmer clicks a button on the app, and the combine gets delivered the next day.
So far, McElhone is tight-lipped about partnerships in this area of its business, but said announcements should be coming this summer. The company is also considering offering farmers insights into the best times and places to sell crops, with CropSafe taking a small cut of revenues for the service. (The idea is that farmers would only pay when they see increased sales from using CropSafe’s insights, McElhone said.)
But the move to Santa Monica has already proven fertile for the company, which is planning to announce partnerships with other agtech companies that would allow CropSafe to act more as an operating system—one connecting autonomous tractors, weathers sensors, and other “internet of things” technologies to ensure better, more sustainable crops. With local startups like Future Acres and Abundant Robotics already operating in the space, CropSafe seems poised to benefit from Southern California’s position as a hub for agtech in the U.S.
On this episode of the LA Venture podcast, Cedars Sinai Health Ventures’ Maureen Klewicki talks about price transparency for health care, the labor shortage crisis and emerging payment models.
Klewicki got her start working in the venture capital industry as the program director at the Techstars Healthcare accelerator. She then spent five years working at L.A.-based venture firm Crosscut. At Cedars Sinai, she helps cut checks of between $1 million and $10 million from the venture firm’s $100 million fund.
“There's one million and one problems right now Cedars Sinai is facing,” Klewicki said. The fund is structured in part to focus on the long-term future of the health care industry, but about half of it is focused on the immediate problems that Cedars doctors and staff are facing.
To get an understanding of their pain points, Klewicki said she talks directly with leaders of departments from nursing to surgery, asking them: “‘What are you thinking about? Where do you need help? And where can we find a company that we can plug in right now?’”
The pandemic has taken a toll on health care workers, Klewicki said, exacerbating a huge nursing shortage and adding more trauma to an already overworked labor pool. But Klewicki also says that the labor force crisis could be a thesis for an entire fund.
“Could you solve it through the use of smart robotics? Could you solve it through computer vision? Could you solve it through ambient scribing?,” she asks. ”Can you do things that make it so that nurses aren't spending 30% of the time logging things into the EHR?”
Another crucial issue for Cedars: keeping the cost of care down. One strategy has been keeping patients out of the hospital if they don't need to be there, and making sure they have a range of services at home. There are a number of different solutions that are being developed toward that end, Klewicki said, from teams that are made up of both health care professionals and tech entrepreneurs.
“You might see a team that is half-Uber and half-health care execs,” she said. “And so that's where I think you start to see these really cool combinations of technologists and people that know health care really well.”
Klewecki said recent changes in how hospitals get reimbursed have incentivized startups that focus on a “value-based” health care model that focuses on preventative care.
“Because that overall care team approach is what keeps the cost of care down,” she said “And so you see a lot of movement from VC-backed and private equity-backed companies in the value-based care space because that's where the payment models are moving.”
That might mean setting up urgent care facilities in different neighborhoods, sending providers to aid patients at home or focusing more on telemedicine rather than bringing patients to hospitals.
Klewicki added, “If you do it right, you can have a very valuable company that is improving outcomes for patients.”
dot.LA Engagement Fellow Joshua Letona contributed to this post.
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