Connecticut venture capital fund enters growing cannabis market with $1.25 million investment in edibles – Hartford Courant
The Connecticut venture capital fund is one of the first institutional investors to venture into the growing cannabis business, committing $1.25 million to a maker of edibles aimed at improving energy, concentration and mental health.
Connecticut Innovationswhich has over 200 portfolio companies and $300 million in assets under management, invested in 1906 New Heightswhich manufactures pills combining “moderately dosed cannabis” with medicinal plants.
Connecticut Innovation invests in sustainable technology, or green technology, consumer and healthcare products, technology companies, and venture capital funds with the goal of creating jobs in Connecticut. It’s taking a new direction in cannabis, viewing 1906 New Highs as an emerging field, said Lauren Carmody, vice president of marketing and communications.
“We love the science behind it,” she said. “It could open the door to other entrepreneurs.”
1906 New Highs products focus on energy, cognitive focus, mental health and happiness and are alternatives to alcohol and pharmaceuticals, according to the company. Founder and CEO Peter Barsoom said the products are not targeted for depression, which is a clinical condition.
According to the company, the pills promise “fast acting” and “precision effects” to deliver a range of benefits, including greater energy and focus through herbal remedies and caffeine; euphoric medicinal plants to promote happiness; and an aphrodisiac to boost intimacy and arousal.
For 1906 New Highs, which employs 80 people, Connecticut Innovations’ investment is a “significant milestone,” Barsoom said. The industry has attracted few institutional investors, as many wait for Congress and the president to change federal law listing marijuana as a controlled substance.
The private company, founded in 2015, said its name refers to 1906 when cannabis was last “widely accepted as a beneficial medicine”.
Governor Ned Lamont signed legislation last year allowing the sale of recreational marijuana to adults 21 or older who can purchase and possess up to 1.5 ounces, or up to 5 ounces locked up at home or in the glove box or trunk of a vehicle.
The state is creating an industry, running lotteries to obtain licenses to grow, distribute, manufacture, and sell cannabis.
1906 New Highs applies for a license in Connecticut as a food and beverage company, and if it were to win a general lottery license, it would, however, follow with research and development and manufacturing, Barsoom said. It is one of 122 applicants for the general lottery, which it says has better odds than the 7,245 applicants for retail licenses or 2,945 grower applications.
If he were to fail the lottery, Barsoom said he would find another way to establish a manufacturing operation. The company does not compete in the market Social Equity Council Lottery which was created to promote the cannabis trade in black and other underrepresented communities.
What is missing is institutional support that could unlock billions of dollars of cannabis investment. Companies cannot access capital available at banks that fear losing their federal charters, said Todd Harrison, founding partner and chief investment officer at CB1 Capital, an investment manager specializing in the supply chain of cannabinoid-based wellness products and therapies.
Due to the size and lucrative potential of the cannabis industry, federal law could change this year, he said. He says his view is in the minority.
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“Our feeling is that this is all going to go away,” Harrison said. “It will take time. The banking problems will go away this year.
The US House of Representatives voted in April to decriminalize marijuana at the federal level, but the Senate has yet to act.
Access to capital is also limited by brokerage firms that have opposed buying cannabis stocks, instead of only allowing them to be sold. The result, Harrison said, is “pushing back the institutions.”
Up to 96% of US cannabis stock owners are individual investors, he said.
Harrison highlighted the medicinal and other beneficial effects of cannabis, a growing industry that can boost jobs and investment.
“It’s real money. It’s real jobs,” he said. “It’s about getting well. It’s not about getting high. It’s a really good plant. »
Stephen Singer can be reached at [email protected].