Salveo Capital Press

Treez, a Salveo Capital portfolio company and leading provider of an enterprise cloud platform that streamlines retail and supply chain operations in the cannabis market, was named to Inc. Magazine's annual Inc. 5000, the most prestigious ranking of the nation's fastest-growing private companies.

Treez's three-year revenue growth rate of 597 percent led to recognition in the Inc. 5000 list. In volume of transactions, Treez is considered the market-leading software used by dispensaries in California and operates in five other states with rapid expansion underway nationwide. Treez's success with retailers and brands nationwide also has resulted in nearly $4 billion in gross merchandise value (GMV).

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Milan Patel hasn't been getting much sleep lately. The CEO of Scottsdale-based PathogenDx LLC, a Salveo Capital portfolio company, has been spending night and day working on a new Covid diagnostic test that can detect variants, including the Delta variant that has been on the rise in Arizona.

The new test, called DetectX-Rx has been given emergency use authorization by the U.S. Food and Drug Administration and CE-IVD mark by the European Union. The test can process 94 samples in a single run, deliver results in four hours and detect variants of the Covid-19 virus as well as the flu. Patel said he has received $7 million in grants from the National Institutes of Health's Radx initiative to fast track his Covid diagnostic tests.

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Ascend Wellness Holdings (OTCQX:AWWH), a Salveo Capital portfolio company, is a multi-state cannabis operator with at-scale assets in attractive markets with 135% and 86% revenue growth expected in FY21 and FY22, respectively. Despite strong growth and margins, shares trade at 8.1x FY22 EBITDA, providing investors with a very attractive entry point.

- AWWH is one of the premier multi-state operators (MSOs) in the high-growth U.S. cannabis industry with operations in IL, MA, MI, NJ, OH, and NY.

- Growth over the next two years will be fueled by expansion efforts in IL and MA, and the launch of adult-use sales in NJ (late 2021) and NY (2023).

- Shares are trading at 8.1x FY22 EBITDA, which is very attractive considering the company’s top-line growth (+135% in FY21) and EBITDA margin profile (+26% in FY21).

- AWWH shares are likely to rally upon uplisting from the OTC or the federal legalization of cannabis. On a fundamental basis, we see over 100%-300% upside.

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SC Labs, a Salveo Capital portfolio company, has received ISO accreditation for a comprehensive hemp/CBD testing panel that combines the regulatory requirements of all states that publish hemp testing rules. At present, there are no federally-required testing regulations for hemp and each state has its own set of requirements, making it difficult for consumers to navigate the safety of products and for companies to qualify products beyond individual state standards.

According to SC Labs CEO Jeff Gray, “As an industry, we’ve been advocating for national, standardized, and transparent testing regulations for years now. The government has been slow to respond so we decided it was time to act. The test we’ve created meets or exceeds the requirements of most states and that will give consumers greater peace of mind. No one else can say that right now.”

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AWH and CURA, two Salveo Capital portfolio companies (CURA via acquisition of Grassroots) list on U.S. News’ 6 Best Marijuana Stocks to Buy.

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• Cannabis Co Ascend Wellness Holdings Taps Former Ford Exec Joe Hinrichs To Its Board

• Cannabis distributor HERBL has tapped Mark Shamber to oversee its financial department.

• Treez Names Former Oracle’s Shon Wedde VP Of Engineering

• Fyllo Names New CFO, CLO, And Head Of People
  
  

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Front Range Biosciences ("FRB"), a Salveo Capital portfolio company and cannabis/hemp genetics platform, leveraging next generation breeding technology and R&D, announced today that it will license its proprietary technology for cannabis phytochemical detection and quantification along with genomic marker detection and analysis for commercial use to the Centre for Research in Agricultural Genomics, a Spanish consortium ("CRAG") and IRTA, one of the consortium partners. The agreement builds on an existing partnership between the FRB, CRAG, and IRTA formed in 2019 to develop research tools for the genetic improvement of cannabis plants.

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Front Range Biosciences (a Salveo Capital portfolio company), agricultural biotech company focused on high-value crops such as cannabis, and Native Roots Cannabis Co., a dispensary chain with Boulder Valley locations in Longmont and Boulder, are partnering to begin a new cannabis tissue culture program at Native Roots’ flagship location in Denver. The program, which FRB says is the first of its kind in Colorado, is aimed at helping Native Roots increase yields, ensure consistency and protect against pathogens.

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HERBL, a Salveo Capital portfolio company and California's largest cannabis supply chain solutions company, announced its exclusive distribution partnership with Forbidden Flowers, a line of thoughtfully curated cannabis products created by American actress, model, singer and entrepreneur Bella Thorne in collaboration with Glass House Group.

Launched in 2019, Forbidden Flowers' selection of beautifully packaged and sun grown fresh flower eighths and pre-rolls has been immensely popular among young female consumers, one of the fastest-growing demographics in the industry. HERBL will help scale Forbidden Flowers' current retail footprint, which spans 57 locations throughout California, through its expansive network of retail partners.

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Marijuana technology firm Fyllo, a Salveo Capital portfolio company, is moving its headquarters to the The Old Post Office, after recently raising $30 million to fund its rapid growth. Investors in the company include JW Asset Management, Sol Global, Salveo Capital, Entourage Effect Capital, the Lurie family and the Steinbrenner family, which owns the New York Yankees.

Fyllo’s move to one of Chicago’s largest office buildings comes less than two years after founders Chad Bronstein, Aristotle Loumis and Erik Shani launched the company out of a co-working space. Fyllo expects double to quadruple revenue gains in each of the next few years as more states legalize cannabis sales, and the ultrawide building also provides room for expansion through acquisitions, Bronstein said.

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NY based AWH (CSE:AAWH), a Salveo Capital portfolio company, reported Tuesday it had generated $66.1m of revenue in the first quarter of 2021, representing a 21.8% sequential growth. AWH operates 14 dispensaries, including shops in Fairview Heights, IL and Grand Rapids, MI, which It launched during the first quarter. In April the company opened a 16,000 sqft pot supermarket in downtown Boston, MA.

“By allocating our investors' capital in emerging recreational markets with strong barriers to entry, we continue to position AWH for sustainable growth in the most attractive markets in the U.S" said Abner Kurtin, Founder/CEO. Here's a breakdown of the Q1 earnings:

- Retail revenue hit $45.5m in the first three months of the year, up 20% QoQ
- Wholesale revenue amounted to $30.3m, representing a 38% sequential increase.
- Adj. EBITDA came in positive at $15.8m, up 57.8% QoQ.
- AWH disclosed it expects to generate between $320m and $340m in 2021.

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Curaleaf, a Salveo Capital portfolio company, has signed definitive documents to acquire the Los Sueños Farms and its related entities in Colorado. The proposed transaction includes three Pueblo, Colorado outdoor cannabis grow facilities covering 66 acres of cultivation capacity, including land, equipment and licensed operating entities, an 1,800 plant indoor grow and two retail cannabis dispensary locations serving adult use customers.

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Ascend Wellness Holdings, a Salveo Capital portfolio company and multi-state cannabis operator with activities in Illinois, Michigan, Massachusetts, New Jersey and Ohio, is going public, in what several industry professionals are calling “the most anticipated [cannabis] IPO of the year.” The stock starts trading on the Canadian Securities Exchange (CSE) today, Tuesday, May 4, under the “AAWH” ticker. An OTCQX Best Market listing is expected in the next few days.

According to management, proceeds from the offering will be used to fund expansion in New York and Ohio, as well as some other capital expenditures. A percentage of the money will be set aside for “future M&A transactions, general administration, tax liabilities, working capital, and general corporate purposes.”

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As jobs in cannabis industry spike, despite the current pandemic, Wurk is feeling the impacts. According to the 2021 Leafly Jobs Report, the cannabis industry now employs 321,000 people in the U.S. as of January 2021, having added 77,300 full-time jobs over the last year for a 32% increase.

In order to keep up with that booming workforce, Würk, a human capital management company for the cannabis industry, announced an oversubscribed $3.5m Series AA round of financing. The round was led by Wurk Investment Partnership with participation from Salveo Capital, Poseidon Asset Management and The Arcview Group, among others. Prior to this round, Wurk had raised $22m in funding.

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Venture capital continues to flow into cannabis-focused software companies as Chicago-based Fyllo, a Salveo Capital portfolio company, announced a $30 million close. The company, founded in 2019, has raised approximately $60 million to date. Peter Kraus, former CEO of famed investment manager AllianceBerstein, will join Fyllo’s board of directors. Additional board members include Mitch Kahn, whose previous company Grassroots Cannabis (a Salveo Capital portfolio company) sold to Curaleaf for $840 million. “Fyllo from the very beginning was able to attract investors,” said Michael Gruber, managing partner at Salveo, which invests exclusively in cannabis-oriented companies. “We believe it could be an active acquirer of other businesses and has the ability to go public.”

Valuations for cannabis software companies with multiple enterprise plant-touching customers are rising. Last month, Dutchie raised $200 million in a round that valued the company at $1.7 billion. Dutchie used the proceeds to acquire leading cannabis POS software companies Leaflogix and Greenbits. “What’s clear is that tailwinds have finally come behind us as they relate to ancillary companies,” said Gruber, an early investor in Leaflogix. “Big money is coming in.” Salveo also invests in plant-touching companies, including New York-based Ascend Wellness Holdings which plans to become publicly traded later this month.

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Fyllo, the leader in digital marketing and compliance solutions technology for highly regulated industries, including cannabis, has closed an oversubscribed Series B round totaling $30M co-led by JW Asset Management and Sol Global. Of note, sixty percent of the funds raised in the Series B comes from outside of the cannabis industry, underscoring the maturity of the burgeoning cannabis market and validating the Company’s potential to scale beyond the endemic market to address similar challenges faced in other highly regulated industries. Round participants include Salveo Capital, K2, Entourage Effect Capital, George Steinbrenner IV, Arcadian Capital Management, and 2 NRP Managers, LLC an investment group led by Ben Lurie.

Fyllo has raised nearly $60m since it was launched in 2019 to solve the most pressing marketing and compliance challenges facing the cannabis sector and other highly regulated industries. The Company’s Fyllo Compliance Cloud suite of SaaS software is used by multi-state operators that include Columbia Care and Grassroots Cannabis (also a Salveo Capital portfolio company).

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The Midwest’s biggest city is emerging as an increasingly crucial financial epicenter of the booming multibillion-dollar marijuana industry. “[Illinois] is a billion-dollar market today and on the way to being a $3-to-$4 billion market. If you want exposure in the biggest market, then Illinois is at the top of your list.” said Andy Grossman, Green Thumb’s head of capital markets. It’s not just plant-touching companies that have been drawn to Chicago. Fyllo, a Salveo Capital portfolio company and data/software startup that helps cannabis companies comply with city and state regulations, started here in 2019.

There’s also a deep pool of institutional investors and family offices in Chicago to support cannabis entrepreneurs. That will continue to grow even after New York and New Jersey start to gain traction in the industry, says Jeff Howard, managing partner of Salveo Capital. “Think of it like Silicon Valley,” he said. “As much as people might want to criticize it, it’s still the tech center of the world. The technological heartbeat is still in Silicon Valley but the capital markets exist on Wall Street. You’ll see the same in the weed industry.”

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Fyllo, a Salveo Capital portfolio company and leader in digital marketing/compliance solutions for highly regulated industries, announced that it has appointed media and data leader Joe Raaen as Vice President of Product Management. In addition, Roxanne Taylor, an accomplished and recognized marketing professional, will join the Fyllo Board of Directors.

Raaen comes from Omnicom Group where he was Director of Global Strategic Partnerships for Annalect, Omnicom Groups’ data, and analytics hub. For nearly a decade, Raaen managed negotiations and strategy around partnerships for global data partners that are integrated into platforms used by all agencies across Omnicom Group.

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Dutchie, which runs a platform for ordering marijuana online, has notched a $1.7 billion valuation to become one of the most valuable venture capital-backed cannabis startups. The $200 million Series C catapulted the company's valuation to more than eight times its $205 million value last August.

In addition to the cash haul, Dutchie has acquired Greenbits and LeafLogix, which both make enterprise software for marijuana dispensaries. Greenbits was valued at $58 million last year. LeafLogix has received funding from Salveo Capital and Tupancy Capital, and was valued at $13.9 million in 2019, the data shows.

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Dutchie – the cannabis technology platform powering dispensaries and providing safe and easy access to cannabis – announced the completion of its $200 million Series C, at a $1.7 billion valuation. The company is also announcing its acquisitions of Greenbits and LeafLogix (a Salveo Capital portfolio company), two enterprise resource planning (ERP) and point-of-sale (POS) software solutions serving the cannabis industry, to provide more value to dispensaries and consumers.

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