Fyllo, a young Chicago startup that’s growing quickly in the marijuana-tech space, announced Friday that it has acquired a Denver cannabis startup.
Fyllo, which helps cannabis brands execute and create ad campaigns that comply with state and federal regulations, purchased CannaRegs for $10 million, Fyllo confirmed to Chicago Inno.
CannaRegs, founded in 2014 by Amanda Ostrowitz and Lester Firstenberger, is an online SaaS database that provides all state and municipal cannabis rules and regulations.
The acquisition comes not long after Fyllo raised an $18 million Series A round led by New York-based JW Asset Management and Canada-based K2 & Associates.
Founded just last year by Chad Bronstein and Aristotle Loumis, Fyllo’s marketing tech platform helps marijuana brands ensure their ad campaigns comply with varying state and federal regulations. Marijuana and CBD companies can be fined if one of their digital ads runs in a state where their product is not allowed, or if it’s seen by someone underage.
Fyllo, which was recently named one of Chicago Inno’s 20 Startups to Watch in 2020, says it helps cannabis companies meet compliance requirements at scale, giving brands piece of mind that they’re only advertising to their intended, legal audience.
With the acquisition of CannaRegs, Fyllo says it can help marketers create larger campaigns knowing they are compliant with state regulations around the country. CannaRegs' platform uses machine learning algorithms to aggregate fact-based data about cannabis guidelines and ensures subscribers are always up-to-date on any change.
As part of the acquisition, which was paid for in cash and stock, Fyllo is on-boarding more than 150 new customers.
“CannaRegs has become the go-to market leader for supplying the cannabis industry with reliable compliance data,” said Bronstein, Fyllo’s CEO, in a statement. “Combined with our technology, we are able to provide actionable information at scale. This acquisition helps us gain a significant competitive advantage to grow Fyllo.”
Bronstein, who has more than a decade of experience in the digital marketing space, was previously the VP of sales at Adconion Media Group, which was acquired by large marketing tech firm Amobee in 2014. He was promoted to Amobee’s chief revenue officer in 2018.
Fyllo said that all of CannaRegs' 34 employees will continue to work out of their offices in Denver, and that Ostrowitz, CannaRegs’ co-founder and CEO, has been named the combined company's chief strategy officer.
Along with its headquarters in Chicago and offices in Denver, Fyllo also has outposts in Los Angeles, New York, Toronto and Tel Aviv. Fyllo says it now employs 70 people, up from just 20 in September.
Jim Dallke contributed to this report
