Newsletter August 2023 – KEY’s Latest Investment is an Exciting One!
KEY Investment Partners Portfolio Company BDSA Forges A New Strategic Partnership
Founded in 2015, BDSA is the premier source of market research and analytics for the cannabis industry. BDSA has recently entered into a partnership with Management Science Associates, Inc. (MSA), a provider of innovative analytics and data-driven solutions for Fortune 500 companies. The strategic partnership is aimed at revolutionizing cannabis market insights. This collaboration combines BDSA’s expertise in the cannabis industry with MSA’s capabilities in CPG, healthcare, and government sectors. Together they will offer unparalleled data collection and analysis, including de-identifying health information for consumer and pharmaceutical insights.
The partnership aims to provide groundbreaking data on cannabis consumption’s impact on consumer health and purchasing behavior. Manufacturers can benefit from enhanced visibility into cannabis dispensary sales, allowing them to target the right products to the right audience. The alliance promises transformative insights for cannabis, CPG, and pharma categories, driving growth and innovation in the industry.
Read the full announcement here.
KEY Funding Announcement
KEY Investment Partners Leads Botanica’s $9mn Series B Round!
Botanica, the makers of Mr. Moxey’s and Journeyman cannabis-infused edibles, has secured a strategic investment of $9 million in Series B funding from institutional cannabis investors led by KEY Investment Partners and GreenAxs Capital. Other firms, including Entourage Effect Capital and AFI Capital Partners, also participated in the funding round. The funding will be used to expand market share in their current locations and facilitate multistate expansion. Since its inception in 2014, Botanica has been focused on creating innovative edible brands to drive mainstream adoption of cannabis. Mr. Moxey’s, their flagship product, has become the leading low-dose edible in the country with over 40 million mints sold and an average 60% market share in every state where it is available. Their Journeyman brand is also gaining traction in the small-format drinks and gummy category, particularly in Washington, and will soon launch in Illinois.
Tiby Erdely of KEY Investment Partners will join Botanica’s Board of Directors as part of the financing agreement. The company plans to expand Mr. Moxey’s presence and launch the Journeyman Lemonade in three new states in 2023, followed by additional East Coast territories in 2024. The funding will also be used to explore possible acquisitions of complementary operations. Botanica’s success in the competitive Washington State cannabis market, combined with the new funding and operational efficiencies, positions the company as a major player on the national stage, aggressively pursuing new markets and cementing their position as a market leader.
News Around the Industry
Philip Morris Buying Israeli Cannabis Firm For Up To $650M, Report Says
Tobacco giant Philip Morris International is reportedly acquiring Israeli cannabis tech firm Syqe Medical in a deal valued at up to $650 million. Syqe Medical’s main product is a metered-dose pharmaceutical-grade inhaler that allows patients to measure precise doses of medical cannabis. If completed, this deal would be one of the largest investments by a tobacco producer in the cannabis industry. Philip Morris is initially investing $120 million in Syqe and plans to purchase the remaining shares if the Israeli company obtains FDA approval for its inhaler after clinical trials.
The acquisition would make Syqe one of the most valuable cannabis companies globally. Philip Morris had previously invested $20 million in Syqe when it was still a startup. The move by Philip Morris to buy Syqe Medical reflects the company’s interest in tapping into the growing vaped medical cannabis market, estimated to be worth $22 billion in the next decade to fifteen years.
Image Source: Pixabay
States Give Cannabis Data To Biden Administration For Rescheduling Review
Several states with medical marijuana programs have shared vital data with U.S. health regulators as part of the Biden administration’s review of whether to remove marijuana from the federal government’s list of dangerous drugs. The data shared includes information on the products used by patients and their effects, providing federal researchers with a deeper understanding of marijuana use and its medical potential. So far, Illinois, Maryland, Massachusetts, Minnesota, and Utah have shared data with federal health regulators, aiming to influence the review of cannabis’ status under the Controlled Substances Act.
The review could lead to lower federal taxes for cannabis companies, better access to financial services, interstate commerce, and possibly federal marijuana legalization. However, the final outcome remains uncertain. Some experts predict that health officials are unlikely to entirely remove marijuana from the Controlled Substances Act.
Image Source: Pixabay
NBA Officially Signs Contract Removing Cannabis From Banned Substances List And Allowing Players To Invest In Cannabis Companies
The National Basketball Association (NBA) and its players union have signed a new collective bargaining agreement that removes marijuana from the list of banned substances. This agreement allows players to invest in and promote cannabis brands with some restrictions. Players can have ownership interests in entities producing or selling CBD products containing up to 0.3 percent THC by dry weight. Players are permitted to invest in marijuana companies, but only if their involvement is passive and their ownership stake in the business is below 50 percent. Players are also allowed to endorse CBD products.
Cannabis use by players is now treated similarly to alcohol use, with teams having the option to refer players for mandatory evaluations if there is reasonable cause to believe they were under the influence during team activities.
The agreement formalizes the NBA’s decision to suspend cannabis testing for the past three seasons, and it reflects a growing trend of professional leagues reforming their marijuana policies as more states legalize cannabis. Other sports organizations, such as the NCAA, UFC, and NFL, have also made changes to their marijuana policies in recent years. Additionally, the NBA and its players union have jointly funded research on the therapeutic benefits of CBD as an alternative pain treatment for players with concussions.
Image Source: Pixabay
TerrAscend Receives Conditional Approval To List On The TSX
Earlier this quarter, TerrAscend Corp., a prominent North American cannabis operator, announced that it has received conditional approval from the Toronto Stock Exchange (TSX) to list its common shares on the exchange (TSX Listing). The company’s Executive Chairman, Jason Wild, expressed gratitude to the teams at TSX, TerrAscend, and Cassels for their efforts in reaching this milestone. He also mentioned the excitement of sharing the TerrAscend story with a larger audience of participants due to the listing.
The TSX Listing is subject to the fulfillment of certain customary conditions required by the exchange. Once the TSX confirms the date for trading to begin on the exchange, the company will issue a press release. In conjunction with the TSX Listing, TerrAscend has made a request to voluntarily delist its common shares from the Canadian Securities Exchange (CSE), with the CSE Delisting expected to take effect around the time the shares commence trading on the TSX.
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