Through digital media, events, data and more, American Inno is building the largest network of local innovation, cultivating engaged startup, tech and entrepreneurial communities in 12 (and counting) markets across the country. In a new bi-weekly series, Inno’s writers will collectively select an industry or theme and highlight a local startup operating in the space.
Tomorrow is April 20 — 4/20 — weed's biggest holiday.
For many watching the marijuana business space, however, it feels as though the celebration has been happening with increasing fervor all year long — or really, for the past couple of years as the industry has seen consistent growth.
To quote a recent Fortune article, "these are high times for the American cannabis industry." Another report predicts that on sales platform LeafLink, this year's 4/20 (and April in general) will have a 180 percent sales growth as compared to the same time last year. That means $1.46 billion in revenue, a 25 percent year over growth to 2018. Whoa.
It doesn't hurt either that recreational marijuana has received the green (wink) light in 10 states, as well as D.C. — plus the burgeoning ubiquity of non-psychoactive cannabidiol of CBD, marijuana and its adjacent products are on the up-and-up.
However, that doesn't mean that everything is coming up roses in the pot industry. "The fact that marijuana remains a Schedule I drug under U.S. law means that most banks continue to be wary of financing the cannabis industry, lest they fall afoul of federal regulations," Fortune writes. "Indeed unlike most fledgling, growing industries, the pot business remains handcuffed when it comes to accessing everything from business loans to payroll services to electronic payment methods (including credit cards, which aren’t accepted at most dispensaries)."
So, where does that leave innovators in the cannabis space? We took a look at American Inno's 12 different markets across the country to get an idea.
MADISON // ATLANTA INNO
Though Georgia hasn’t been known to be a weed-friendly state, Gov. Brian Kemp just signed a medical marijuana bill, which allows for legal cultivation and sale of cannabis oil in the state. This might be a sign that the tides are changing. Atlanta doesn’t have too many marijuana startups, given the tough regulations in the Peach State, but Surterra Wellness, an Atlanta-based medical cannabis company founded in 2014, has raised a total of $100 million since 2015. Most recently, Surterra raised $65 million in a Series C equity round led by chewing gum billionaire William “Beau” Wrigley, Jr. II last year.
Despite being headquartered in Atlanta, Surterra Wellness only has licenses to operate in Texas and Florida at this time. Surterra hopes to conduct clinical research trials related to cannabinoid treatment of anxiety, pain and PTSD, as well as other significant health issues.
BRENT // AUSTIN INNO
Austin has long been a bit of a hippy city where marijuana is considered no big deal by many, despite remaining illegal under state law. While Texas allows very limited use of CBD to treat epilepsy patients, there’s an effort this year at the state legislature to decriminalize possession in small amounts. And the state is removing hemp from its list of controlled substances.
For now, the most involved startup is Compassionate Cultivation, which was the first Texas business approved to distributed marijuana-based medicine to qualified patients. But other Austin startups are finding a variety of roles in the booming cannabis tech industry. Fluence Bioengineering is among the most exciting because it makes LED grow lights. The company, now owned by Osram Licht AG, employs 135 people and counting. Most of its weed-related business happens outside of Texas, but it’s looking for opportunities if Texas relaxes its laws. Other tech companies also have an indirect role in the industry, including Pivot3’s partnership with Wayland Group to provide compliance analysis for quality cannabis-derived medicines and other products.
But, for now, CBD is the main focus of Austin’s marijuana tech sector. Businesses like Radix Remedies, Restart CBD, Lazydaze Counterculture and Joy Organics have all placed a stake in the market, offering the non-intoxicating oil in various forms and for different purposes. Okalhoma-based CBD drink maker Pure Active CBD is in town as part of the SKU accelerator program. Canvas 1839, a new CBD startup, launched a tincture and a cream earlier this week. And, of course, Willie Nelson has his Willie’s Remedy CBD-infused coffee on the market, too.
Rowan and SRI // BOSTINNO
Cannabis ice cream? Brighton-based Cloud Creamery is whipping it up. Headed up by Boston chef David Yusefzadeh, the four-person company is creating pot-infused ice creams in flavors like lavender honey and black sesame with miso caramel, with the goal of distributing them in hospitals, medical facilities and dispensaries. It’s currently in talks with four Boston-area dispensaries and two delivery services.
For Yusefzadeh, the effort is personal: He was diagnosed with Crohn’s Disease in 2011 and relies on cannabis to help him navigate each day.
Cloud Creamery entered into a lease in January for a 1,200-sq.-ft. space in the Framingham area, as reported by MetroWest Daily. And earlier this month, Framingham greenlit the company to negotiate host community agreements with the city.
Katherine // CHICAGO INNO
As cannabidiol, or CBD, has become increasingly popular and accepted as a wellness product, a new Chicago startup is looking to capitalize on the trend. Called Half Day CBD, the startup was launched in January by Dave DiCosola and Kameron Norwood. It makes and sells CBD-based oils, gummies and creams. Half Day’s products, which use oils extracted from hemp plants that don’t get people high, are designed to ease pain and anxiety, and aid with sleep, DiCosola said. Half Day sells its products on its website and in select locations, like CBD shops and chiropractor offices. The startup currently sources hemp from farmers in Kentucky, but manufactures the products in Chicago, an aspect DiCosola says differentiates Half Day from other CBD brands sold in the city.
COURTNEY // CINCY INNO
Since the state legalized medical marijuana in 2018, I've only really stumbled across rumblings and hypotheticals about companies in the Queen City leaning into cannabis as a selling point. Sure, Cincy has connections to marijuana headlines — area attorney Chris Stock was dubbed "the architect of the failed Issue 3 to legalize marijuana in Ohio" by the Enquirer; Rhiengeist was apparently interested in adding a dispensary to its lineup of offerings — there hasn't been a startup on the front lines. Considering the popularity of entities like this (as this list would attest), I'm sure that will change in the future.
NICK // COLORADO INNO
In an effort to ease the entry into medical cannabis, Boulder-based Green Genomix has developed a DNA test that will match people with products that are most effective for them. In December, the company began selling the Green Test DNA Collection Kit. The Green Test uses your DNA to identify specific genetic variants known to be responsible for the uniqueness of your biochemical makeup. This information is used to help determine which cannabis products you should use and how often you should use them for the desired effects.
The test works similarly to current family tree DNA services, as Green Genomix collects an initial questionnaire and saliva sample that is analyzed at the company’s lab. Once the analysis is complete, the company generates a report that tells you how different cannabinoid ratios impact your mood, anxiety, pain perception, cognition and other functions. It then suggests products to fit the targeted effects laid out in your initial questionnaire. The test retails for $149 on Green Genomix’s website.
KIERAN // DC INNO
D.C.-based New Frontier Data is trying to establish itself as the Bloomberg Terminal of weed. It tracks the state of cannabis and its regulation in major legal markets across three continents, identifying priority markets, researching potential investments and making recommendations on execution. Its products include real-time data analysis for cannabis businesses, industry reports and custom research. New Frontier’s data is cited all over the marijuana business news, with publications including country profiles, analyst predictions, the Cannabis Consumer Survey and the CannaBit blog. In 2016, it completed a $5 million funding round that was used to add new staff and open offices in Denver and California, and in February last year it ventured further into the publishing game by acquiring the Hemp Business Journal.
MADDY // MINNE INNO
Marijuana may be illegal in Minnesota, but plenty of local farmers and entrepreneurs are excited about its cousin crop, hemp, which was taken off the federal controlled substance list late last year. Plenty of hemp and CBD businesses have been popping up in 2019. Kindly Coffee is part of this fresh crop of startups. When it launches later this year, the local roaster will be producing coffee infused with hemp extract. Kindly will be the first in Minnesota to sell a CBD-based beverage.
COURTNEY // RHODE ISLAND INNO
Rhode Island is in a similar place as Cincinnati. While medical marijuana is legal, there's 41 licensed cultivators and the drug is apparently having a banner year in-state, there is yet to be a ton of innovation around its legal use.
I found this read on Marijuana Business Daily particularly interesting, however, which argues that cannabis entrepreneurs in Rhody are "increasingly optimistic."
It reads: "They [cannabis entrepreneurs] report an increase in traffic from out-of-state MMJ cardholders in neighboring Connecticut and Massachusetts. They also point to the possibility that state lawmakers may legalize adult-use sales — although some legislators have raised doubts about the initial legalization plan."
Time will tell!
KIERAN // RICHMOND INNO
Medical marijuana is still just getting its start in Richmond. Just five dispensaries have licenses in Virginia, so the state is not yet hospital to companies tangential to the industry. With that said, resident tobacco giant Altria is making moves into the cannabis market as it’s reportedly in talks to buy a minority stake in Canadian marijuana company Aphria. It seemed only a matter of time before the $119 billion conglomerate expanded its reach beyond cigarettes and alcohol (it owns Philip Morris USA and has sizable stakes in AB InBev and Juul), and companies in the business of vices need to send money north if they want to keep a hold on the industry.
LAUREN // TAMPA BAY INNO
Tampa-based Fat Dog Spirits is getting into the holiday season this weekend, but there will be no sightings of the Easter bunny. It will instead be launching its “Nirvana cannabis-infused vodka and gin” with tasting parties throughout the city this Saturday, April 20, starting at — you guessed it — 4:20 p.m.
“We made vodka and gin that just happens to have cannabis in it,” chief scientist Abdul Ally said in a statement.
You can see a whole list of where the tastings will be on their Facebook page. The company was founded in 2016 and its latest product was driven after a Wall Street Journal article stated cannabis beverages products don't mix well and instead taste “like a barnyard.”
“It took us 17 months to accomplish our final product and to arrive to our patent-pending formula,” Ally said. “This is not just a vodka and gin, it’s science in a bottle. This fine product has come to fruition to provide a blissful, relaxing-style feeling.”
JIM // WISCONSIN INNO
Researchers at the University of Wisconsin — Madison have developed a skin-healing use for cannabis by creating coatings, foams and gel-like substances that patients can apply directly to their skin. Working with Canadian company Revive Therapeutics, UW-Madison researchers are helping commercialize the drug, which would be used on people dealing with inflammatory skin disorders.
