Headset, an analytics startup for the nascent marijuana industry, closed a $12.1 million funding round backed by some prominent investors.
The round was led by Poseidon Asset Management, an early Juul investor that’s raising a $75 million venture fund to go after pot startups, and included AFI Capital Partners, a middle-market private equity fund, and Canopy Rivers, the venture arm of the publicly traded marijuana cultivator, Canopy Growth.
The investment is Canopy’s first direct investment in a US company.
“We’re getting a lot of interest right now from consumer packaged goods industry companies, like beverage/alcohol, tobacco, pharma, and even financial services who are all interested in the cannabis industry,” Headset CEO Cy Scott told Business Insider in an interview.
Headset is imbued with cannabis industry DNA: Scott and his cofounder, Brian Wansolich, founded Headset in 2015 after selling Leafly, a cannabis media platform, in 2010 to marijuana investment firm Privateer Holdings.
“We honestly can’t think of a team who’s better positioned to understand the history of this modern cannabis industry and where it needs to go to get it to that next stage,” Emily Paxhia, a founding partner at Poseidon told Business Insider.
Paxhia added that Scott and Wansolich have a “critical vantage point” to understand what types of data are most useful to the cannabis industry, and the pair has a successful track record of scaling and selling startups.
Seattle, Washington-based Headset partners with marijuana shops throughout the US and Canada — where marijuana is legal — to provide market intelligence for retail sales.
Scott said the inbound interest from outside the marijuana industry is a “pretty recent phenomenon.”
“I think in the last year we really saw this sea change happening where before, our client base was strictly cannabis operators, but now we’re expanding into more traditional companies,” Scott said. “They have a real need for our data as they’re looking at opportunities and risks that the cannabis industry will bring.”
Scott said Headset plans to use the money to bolster its presence in Toronto, where it’s recently opened a new office last year, and to double their team by next year.
“We’re really interested in investing in a market like Canada because marijuana’s legal nationwide,” Scott said. “It really just opens up a lot of opportunity.”
To Scott, data is a crucial element of the cannabis industry.
“A lot of brands are vying to be the Johnnie Walker or the Smirnoff of marijuana that’s going to be around for years to come,” Scott said. “But to be able to do that, you need to be able to differentiate yourself. Data helps you do that.”
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