Cannabis Investment Club

[JohnCM]

FOLLOW THE MONEY

Friends,

It has taken quite some time, but we are finally starting to see capital flow more efficiently into the private U.S. cannabis sector. This week, we learned that California-based Flow Kana, which is executing on a unique business model that helps the state's craft cultivators distribute their product and deal with the intense regulatory burden they now face, raised $22 million. The lead investor, Gotham Green Partners, which invested $15 million, has been taking a more prominent role in the sector, having also recently invested $50 million into multi-state operator iAnthus (CSE: IAN) (OTC: ITHUF) after participating in a $10 million raise from GrowGeneration (OTC: GRWG). The firm, based in NYC, recapitalized Cronos Group in 2016 (then PharmaCan Capital) but has turned its attention to the U.S. market. It is also an investor in MedMen (CSE: MMEN) (OTC: MMNFF).

The Flow Kana deal included other investors that we are seeing show up increasingly in news releases about capital raises and which we include on our Cannabis Investors page, like Poseidon Asset and Salveo Capital. We have also profiled Merida Capital, which has invested in public companies GrowGeneration and Kush Bottles (OTC: KSHB) as well as several private companies, including California premium cultivator Canndescent, compliance software company Simplifya, testing lab company Steep Hill and others.

The development of larger funds that are capitalizing the industry benefits both investors and the companies raising capital. For accredited investors, having financial intermediaries allows them diversification and the ability to invest without the burden of extensive due diligence on each individual company. For the companies raising capital, these larger investment funds allow them to streamline the capital raising while still allowing private investors to participate.

Those who are not accredited and able to invest in private funds can still invest in private companies through publicly-traded vehicles, but what we have seen so far exists in Canada exclusively. We are following two publicly-traded investment companies,Cannabis Growth Opportunity Corp (CSE: CGOC) (OTC: CWWBF) and Quinsam Capital (CSE: QCA) (OTC: QCAAF), both of which make investments in private and public U.S cannabis companies (as well as Canadian companies).

We are quite pleased to see these developments and look forward to helping our readers learn more about the fund managers who are helping to capitalize the cannabis industry.