LeafLink credit facility could usher in new era of cannabis capital
A new US$250 million debt deal may be a sign that the cannabis industry is beginning to mature after all. Bloomberg News reports that LeafLink, a wholesale marketplace for cannabis, may see the lending deal as the first to introduce liquidity to the broader market. "To date, most of the smaller operators haven’t been privy to any debt capital," Doug Gordon, executive vice-president of LeafLink Financial, told the news service. “This is the first product that has the ability to inject a large amount of liquidity to serve the industry at large.” The debt was sourced from an undisclosed private commercial lender and will help LeafLink expand its accounts to more than US$2.8-million worth of orders, Bloomberg reports.
Cannabis capital scarce so far this year, with financing down 70%
Capital financing in the cannabis sector has declined by about 70 per cent so far this year compared to the same period a year earlier, according to Viridian Capital Partners. The firm said US$2.6 billion has been raised by cannabis firms in the first 29 weeks of the year, down from the US$8.9 billion raised last year. Capital has been scarce in the cannabis sector amid the COVID-19 pandemic, alongside a general malaise from investors in the space. The average deal size is also smaller so far in 2020 at US$14.8 million, compared to US$23.8 million last year, Viridian says.
California looking to fine illicit cannabis industry associates to support legal sector
California lawmakers are looking at fining businesses or people that support the illicit cannabis industry to help stamp it out and drive more people toward legal pot sales. The LA Times reports that the fines - set as high as US$30,000 - take aim at those who provide advertising and other aid to illicit sellers, and even landlords who knowingly rent retail space to unlicensed cannabis businesses. However, the state's National Organization for the Reform of Marijuana Laws organization isn't supporting the move, saying the fines cast too wide a net and are disproportionate to the crimes. A final vote is expected in California's senate later this month.
Hemp-maker Synchronicity lands four-year sponsorship deal with USL
A U.S. hemp company might be the first cannabis-related business to sponsor a U.S. professional sport, as Synchronicity has landed a four-year deal with the United Soccer League. The deal will see Synchronicity's hemp-based products be featured on USL stadium signage, social media channels and its website. Terms of the deal weren't immediately disclosed. The USL has 47 professional clubs and more than 180 amateur and youth clubs in its membership. Some of its games air on ESPN.
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