- Cannabis startups have raised closed to $2 billion of venture capital cash in 2019, up from just $17 million in 2013.
- As part of a broader effort to track where money is flowing in the cannabis industry — and who's profiting off these deals — Business Insider put together a list of the top venture-backed startups in the sector, ordered by amount raised, using data from Crunchbase and PitchBook.
- Scroll down to see the full list.
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More venture capital money is flowing into cannabis and cannabis-related companies than ever before.
Through the end of October, venture capital firms have poured close to $2 billion into cannabis-industry startups, according to the data provider PitchBook. That's up from just $17 million in 2013, right after Colorado became the first state to open its doors to the commercial cannabis industry.
That number is bolstered by mega-rounds for companies like Pax Labs, which closed a $420 million funding round in April.
Much of that money, however, has flowed into early-stage companies. For companies later in the growth cycle, there still isn't much capital available because THC, the psychoactive component of cannabis, is federally illegal, so many big funds are reluctant to invest.
Most institutional VCs still draw a hard line between cannabis-tech companies, like software platforms for dispensaries, and branded products that "touch the plant"— or sell and distribute THC — a number of venture investors previously told Business Insider.
That's because the cash in these funds often comes from pension funds, endowments, or sovereign wealth funds, who are unwilling to take risks on a brand-new industry in a muddy legal climate.
Cannabis-specific funds — like Altitude Investment Management and Tuatara Capital— that are backed mostly by high-net-worth individuals and family offices, have cropped up to fill that gap for THC-touching companies.
Despite the blockbuster year for cannabis funding, there are signs of mounting headwinds. Average deal size has shrunk over the first three quarters of 2019, according to Crunchbase, as the industry faces obstacles including concerns over vaping THC and the rocky rollout of retail cannabis in markets like California and Massachusetts.
Plus, total funding declined to $452.8 million in the third quarter from $967.1 million in the second, according to PitchBook.
Business Insider took a look at which cannabis and cannabis-related companies have raised the most venture capital since 2013, using data from PitchBook. We've cross-referenced that data with other providers like CrunchBase and backed it up with our own reporting in some cases.
To generate this list, we excluded public companies and noted which companies have raised private debt as part of equity funding rounds. We're including private debt in the total amount raised because that's how those companies have chosen to report this information.
It's also important to note that a lot of the venture capital in the cannabis industry comes from high net worth individuals and family offices, rather than traditional funds, for the aforementioned reasons.
Here are the 25 cannabis startups that have raised the most venture capital, ordered from least to most:
Flowhub — $28.6 million
Date founded: 2015
What it does: Flowhub is a retail management platform for cannabis dispensaries.
Largest deal: $23 million Series A, October 25, 2019
Post-money valuation: Unknown
Prominent backers: Evolv Ventures, David Stern, 9Yards Capital, Poseidon Asset Management
1906 — $30.8 million
Date founded: 2017
What it does: 1906 is a Colorado-based cannabis edibles brand.
Largest deal: $18 million Series A, October 28, 2019
Post-money valuation: $40-50 million
Prominent backers: Explorer Equity Group, Navy Capital
CannaCraft — $34.9 million
Date founded: 2014
What it does: CannaCraft is a Sonoma County, California based medical cannabis company.
Largest deal: $34.9 million, April 4, 2019
Post-money valuation: Unknown
Prominent backers: Big Rock Capital, Mesh Ventures
Mile High Labs — $35 million
Date founded: 2016
What it does: Mile High Labs is a Colorad0-based wholesale CBD manufacturer.
Largest deal: $35 million Series A, October 11, 2018
Post-money valuation: Unknown
Prominent backers: Undisclosed
Copperstate Farms — $35.6 million
Date founded: 2016
What it does: Copperstate Farms is an Arizona-based medical cannabis cultivator and retailer.
Largest deal: $35.6 million, October 4, 2017
Post-money valuation: Unknown
Prominent backers: Liberty Health Sciences, Poseidon Asset Management
Steep Hill — $49.4 million
Date founded: 2008
What it does: Steep Hill is a cannabis science company that works in lab testing and research and development, as well as cannabis genetics.
Largest deal: $36 million, August 27, 2018
Post-money valuation: $116 million
Prominent backers: Gotham Green Partners, Merida Capital Partners, Phyto Partners, Poseidon Asset Management, Primex Clinical Laboratories, Slifka Asset Management
HempFusion — $49.5 million
Date founded: 2015
What it does: HempFusion is a CBD company that produces and sells CBD oils, ointments, and tablets.
Largest deal: $36 million, August 13, 2019
Post-money valuation: Unknown
Prominent backers: Andlinger & Company, RADD Capital
Metrc — $50 million
Date founded: 2013
What it does: Metrc is a seed-to-sale tracking software startup that helps cannabis companies comply with local and state laws.
Largest deal: $50 million, October 25, 2018
Post-money valuation: Unknown
Prominent backers: Tiger Global Management, Casa Verde Capital
Loudpack Farms — $50 million
Date founded: 2018
What it does: Loudpack Farms is a California cannabis cultivator and retailer.
Largest deal: $50 million, October 22, 2018
Post-money valuation: Unknown
Prominent backers: Cannabis Growth Opportunity Fund, Altitude Investment Management
LeafLink — $56 million
Date founded: 2015
What it does: LeafLink is a wholesale management platform for the cannabis industry.
Largest deal: $35 million Series B, August 7, 2019
Post-money valuation: $255 million
Prominent backers: Lerer Hippeau, TIA Ventures, Thrive Capital, Nosara Capital
Canndescent — $57 million
Date founded: 2015
What it does: California-based Canndescent bills itself as a cannabis consumer packaged goods company. It has two marijuana brands it sells in California: Canndescent and the cheaper Goodbrands.
Largest deal: $27.5 million Series C, September 19, 2019
Post-money valuation: $200 to $300 million
Prominent backers: Green Acre Capital, Altitude Investment Management, JW Asset Management
Vertical Companies — $58 million
Date founded: 2014
What it does: Vertical Companies is a California-based marijuana and CBD producer.
Largest deal: $58 million Series A, April 1, 2019
Post-money valuation: Unknown
Prominent backers: Merida Capital Partners
Hound Labs — $65 milion
Date founded: 2014
What it does: Hound Labs is working on a marijuana breathalyzer.
Largest deal: $30 million Series D, October 27, 2019
Post-money valuation: Unknown
Prominent backers: Main Street Advisors, Benchmark, Intrinsic Capital Partners, NFP Ventures, Icon Ventures
Holistic Industries — $68.9 million
Date founded: 2011
What it does: Holistic Industries is a Maryland-based medical cannabis company.
Largest deal: $55 million Series A, October 17, 2019
Post-money valuation: N/A
Prominent backers: Entourage Effect Capital
Caliva — $75 million
Date founded: 2015
What it does: Caliva is a California-based marijuana brand and retailer.
Largest deal: $75 million, January 24, 2019
Post-money valuation: Unknown
Prominent backers: Liquid 2 Ventures, Joe Montana, Carol Bartz
Sentia Wellness — $91.6 million
Date founded: 2019
What it does: Founded by former Cura partners, Sentia Wellness is a Portland, Oregon based CBD startup.
Largest deal: $91 million (mix of debt and equity), July 30, 2019
Post-money valuation: Unknown
Prominent backers: The Ropart Asset Management Funds, Measure 8 Venture Partners
Ascend Wellness Holdings — $95 million
Date founded: 2018
What it does: Ascend Wellness Holdings is a cannabis cultivator and retailer based in Massachusetts.
Largest deal: $40 million, December 6, 2018
Post-money valuation: Unknown
Prominent backers: Poseidon Asset Management, Salveo Capital, JM10 Partners, Shire Capital Advisors
Integrated CBD — $95.7 million
Date founded: 2018
What it does: Integrated CBD is an industrial-scale hemp oil manufacturer.
Largest deal: $50 million Series A (mix of debt and equity), October 8, 2019
Post-money valuation: Unknown
Prominent backers: Navy Capital
Grassroots Cannabis — $100 million
Date founded: 2014
What it does: Grassroots Cannabis is an Illinois-based medical cannabis cultivator and retailer. Publicly traded cannabis company Curaleaf has agreed to acquire Grassroots in an $875 million cash and stock deal.
Largest deal: $90 million, March 29, 2019
Post-money valuation: N/A
Prominent backers: Altitude Investment Management, Bengal Capital, Cannabis Growth Opportunity, John Fritzel, Salveo Capital, Vernon & Park Capital
PharmaCann — $100.8 million
Date founded: 2014
What it does: PharmaCann is an Illinois-based cannabis cultivator and retailer. The company recently pulled out of a planned merger with MedMen.
Largest deal: $45 million mix of equity and debt, June 29, 2018
Post-money valuation: N/A
Prominent backers: Big Rock Capital
Eaze — $116.5 million
Date founded: 2014
What it does: Eaze is a cannabis delivery service based in San Francisco.
Largest deal: $65 million Series C, December 13, 2018
Post-money valuation: $315 million
Prominent backers: Jim Clark, DCM Ventures
Flow Kana — $147.8 million
Date founded: 2014
What it does: Flow Kana is a cannabis distributor based in Northern California.
Largest deal: $125 million Series B, December 18, 2018
Post-money valuation: N/A
Prominent backers: Reason Venture Partners, Gotham Green Partners, Salveo Capital
Privateer Holdings — $182 million
Date founded: 2010
What it does: Privateer Holdings is a private equity firm that invests in cannabis companies. Tilray CEO Brendan Kennedy co-founded the firm.
Largest deal: $100 million Series C, January 25, 2018
Post-money valuation: $900 million
Prominent backers: Altitude Investment Management, Founders Fund, John Battelle, Subversive Capital, Three Tree Ventures
Parallel (formerly Surterra Wellness) — $366.2 million
Date founded: 2014
What it does: Parallel — formerly Surterra Wellness— is a cannabis cultivator and retailer with operations in Florida, Texas, Nevada, and Massachusetts. The company's CEO is William "Beau" Wrigley Jr., of the Wrigley fortune, who also has invested in the company through his private investment arm.
Largest deal: $100 million Series D, June 27, 2019
Post-money valuation: N/A
Prominent backers: Valkyrie Capital, Wychwood Asset Management
Pax Labs — $546.7 million
Date founded: 2007
What it does:Pax is a maker of cannabis vaporizers and vaporizer technology.
Largest deal: $420 million Series B, April 22, 2019
Post-money valuation: $1.7 billion
Prominent backers: Prescott General Partners, Fidelity Investments, Tiger Global Management, Redmile Group, Tao Capital Partners, Poseidon Asset Management, Valor Equity Partners.