Summary List Placement
If 2020 was the year for cannabis startups to tighten their belts and focus on weathering the pandemic, then 2021 is set to be a boon for companies that have emerged mostly unscathed, investors told Business Insider.
We asked top private equity and venture investors in the cannabis industry to name the startups they believe are poised for major growth this year. The startups that made our list range from dispensaries and cultivation chains like Ascend Wellness Holdings, to cannabis software firms like Dutchie, to companies working on biosynthesis and agricultural technology.
Most of the investors we talked to said that startups with strong management teams will have lots of opportunity in front of them this year, as more states open legal cannabis markets, and institutional investors start getting more comfortable with the industry.
Read more: From LeafLink to Greenbits, meet the 8 buzzy cannabis startups that raised the most cash in 2020
There was a significant uptick in VC interest in cannabis startups in 2020, particularly on the software side, around August. A number of cannabis tech startups that made our list, including Dutchie, LeafLink, and Springbig, closed large funding rounds this year.
To put together this story, Business Insider asked a representative from each of the 17 investment firms that made our list of the top investors in the industry to name two companies that are poised for huge growth in 2021.
Each investor was asked to recommend one startup they invested in and one they hadn’t. In total, investors gave us 26 names. Here’s the full list, arranged alphabetically:
Abstrax
Founded: 2017
Located: Irvine, CA
Post money valuation: $25 million
Biggest funding round of 2020: $1 million raised in a convertible note deal. The company said it is looking to raise Series A funding this year.
Total raised to date: $2 million
What the company does: Abstrax is a California-based research firm that creates terpene profiles — active chemicals in the cannabis plant — for use in isolates, vaporizers, or even as food and beverage additives.
Why investors like the company:
Panther Opportunity Fund’s principal Jordan Tritt says that Abstrax is “pioneering consumer sensorial experiences in the cannabis industry.”
“Their cutting edge research, development and formulations have the potential to revolutionize various consumer packaged goods products,” he continued.
Amuse
Founded: 2019
Located: Los Angeles, California
Post money valuation: Declined to disclose.
Biggest funding round of 2020: $12 million
Total raised to date: $12 million
What the company does: Amuse is a cannabis delivery firm that connects consumers to dispensaries in the Los Angeles and Orange County areas.
Why investors like the company:
“We believe cannabis is gravitating toward an on-demand model and will look more like the traditional CPG model over the next few years,” Jason Adler, managing member at Gotham Green Partners, told Business Insider.
Adler predicts that as the cannabis market matures, consumers will learn their preferences and won’t visit dispensaries as much.
“Our research showed that distribution could be extremely profitable, and the timing was optimal as delivery infrastructure and players could not keep up with the demand,” he continued.
California doesn’t have enough dispensaries, according …read more
Source:: Business Insider
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