The bud market is arguably far from the bubble stage, evidenced by the latest cannabis co private placement advanced by LeafLink, an online commerce platform for cannabis dispensaries. As reported by multiple news outlets, the US-based firm with offices in LA, San Jose, NYC, and Denver raised $10mil in a private placement offering. The Series A Round was led by London-based Nosara Capital. The oversubscribed round comes on the heels of a $3 million seed investor round the firm closed in February of this year.
In addition to Nosara Capital, Casa Verde, a venture capital firm that focuses on early-stage ancillary investments in the cannabis industry, and Lerer Hippeau Ventures, which has invested in companies such as Venmo, Casper, and Warby Parker subscribed to the private placement offering.
Prospectus.com has prepared a number of business plans, information memorandums and private placement memorandums (PPM) for cannabis industry entrepreneurs; the firm’s PPM services are detailed here
The funds will also be used to expand to new markets across the U.S. LeafLink is already live in 6 states — it expanded to Arizona earlier this month as the state’s medical marijuana market came online — and it plans to put their product in dispensaries in a total of 10 states.
“We’re very supportive investors,” said Karan Wadhera, the managing partner at Casa Verde.
Leaflink Co-founder and CEO Ryan Smith — who is just 26 years old — was the first cannabis entrepreneur to make the Forbes 30 under 30 list in 2016. A serial entrepreneur, Smith founded and exited two companies, one of which he sold to a publicly traded real estate investment firm.
LeafLink handled $186 million in transactions since 2016, Smith told Business Insider. It works with 400 brands, 1,700 retailers, and handled $16 million in gross merchandise value in November, Smith said.
By 2018, the company predicts that its order volume will grow to $500 million as more states legalize cannabis and bigger markets come online, a pitch deck reviewed by Business Insider shows.
“This is a unique opportunity to define an industry that is scaling rapidly,” Smith said.
And, according to the company, LeafLink has 90% market penetration in two of the cannabis industry’s most mature markets — Colorado, and Washington — and it’s seeking to increase its foothold in the lucrative California market.
California is set to begin sales of recreational marijuana on January 1, 2018.
Cannabis tech companies like LeafLink are well-positioned to capitalize on burgeoning cannabis industry. Traditional venture capital firms are reticent to invest directly into “plant-touching” businesses, as cannabis is considered illegal by the federal government.
Companies like LeafLink, which serve the industry but do not touch the plant, are much safer and more “scalable,” Wadhera previously told Business Insider.
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