- Business Insider identified the cannabis startups that closed the biggest funding rounds this year.
- The eight companies on our list collectively raised more than $253 million in 2020.
- They range from private multi-state operators like Ascend Wellness Holdings, which raised $68.2 million in August, to tech startups, like LeafLink, which closed a $40 million Series C in December.
- This year, cannabis startups accounted for a smaller portion of total investment into the cannabis industry compared to their public counterparts.
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From startups to publicly traded companies with multibillion-dollar market values, 2020 was a year of belt-tightening for most cannabis companies as capital dried up before (and during) the pandemic.
But there were still deals on the table, especially for startups with growth potential. There was a significant uptick in VC interest in cannabis startups, particularly on the software side, around August.
That month alone, two startups that made our list, Dutchie and Fyllo, closed significant rounds, and Springbig closed an $11.5 million Series A round (we cut our list off at $15 million). That quarter, venture investors poured over $57 million into cannabis startups, providing a much-needed boost to the sector.
Still, public cannabis companies accounted for a much larger chunk of capital raises this year, according to cannabis advisory firm Viridian Capital Advisors. Public companies made up 82% of all capital raises so far this year, compared to 64% in the same period in 2019, per Viridian.
Cannabis startups accounted for 20% of the total dollars raised in the industry in 2020, down from 31% last year. Still, the eight companies 0n our list raised more than $253 million.
The startups on our list range from private multi-state operators like Ascend Wellness Holdings, which closed a $68.2 million raise in August, to cannabis tech startups, like LeafLink, which closed a $40 million Series C funding round in December.
Most cannabis-focused investors told Business Insider that they’re shifting their investment dollars from early-stage firms to growth-stage companies that already have a proven track record, though many said that they are still open to exceptional newer companies.
Challenges remain for mainstream venture funds looking to bet on cannabis legalization. A few mainstream funds, like Thrive Capital and Founders Fund, have invested in cannabis software companies. But most funds are barred by their investors — who may be pension funds associated with religious groups, or foreign sovereign wealth funds from conservative Middle Eastern countries — from doing deals in cannabis or any other “vice industry,” as we outlined in a deep-dive story last year.
To put together this list, Business Insider asked private market data provider PitchBook for cannabis startups that closed the biggest funding rounds from investors in 2020. We then reached out to each company on our list to confirm the numbers, though some declined to disclose the details we asked for. We focused on equity investments, not debt.
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