Connected Cannabis Raises $30 Million to Fund National Expansion of 'Designer Weed' Brand
To help fund its national expansion, California-based Connected Cannabis Co. has raised $30 million from a group of new and existing investors.
The debt and equity round included existing investors Navy Capital and One Tower group, as well as new investors Emerald Park Capital and Presidio View Capital.
In a news release, Connected CEO Sam Ghods, who previously co-founded the cloud storage company Box Inc., said the growth capital would enable the cannabis firm to bring its “product and brand to consumers in new markets.”
“We are steadfast in our development of new, best-in-class genetics and our production of top-quality flower that has resulted in impressive growth and unwavering customer loyalty,” he said via the release. “That same commitment and quality that we've prided ourselves on from day one will stay with us as we enter additional states.”
The company, which raised $25 million as part of a Series A round in 2019, said it is eyeing Nevada and Michigan as potential expansion markets.
Founded in 2009, Connected currently operates cultivation facilities in California and Arizona. It also has retail locations in Sacramento, San Francisco, and Stockton, according to its website.
In 2017, Connected acquired the Alien Labs, another California-based grower of premium cannabis.
"Connected's product quality is unmatched across the cannabis industry, as exemplified by their dedicated mass following," Navy Capital partner Chetan Gulati said via the release.
Citing data from BDSA, WeedWeek reported that sales of Connected and Alien Labs flower reached nearly $50 million during the first nine months of 2020.
For its part, Connected said it is EBITDA-positive and has experienced 68% year-over-year growth. The company is also forecasting 75% revenue CAGR through 2021.
"The company's success is largely due to their proprietary genetics as well as their ability to grow premium cannabis efficiently and at scale without compromising on quality," Gulati added.
Speaking to the Sacramento Business Journal, Ghods said he’d eventually like to take the 300-person “designer weed” company public.
Additional details are available in the release below.
Connected Cannabis Co. Announces $30 Million Capital Raise
Funding will fuel Connected's national expansion into promising markets beyond California and Arizona for cannabis production at scale
SACRAMENTO, Calif. -- Connected International Inc. ("Connected Cannabis Co." or "Connected"), a premier cannabis cultivator, retailer and market leader in California, today announced the closing of a $30 million capital raise consisting of debt and equity financing. The round was led by existing investors Navy Capital and One Tower Group with participation from new investors Emerald Park Capital, an affiliate of Bryant Park Capital, and Presidio View Capital.
Connected has been building a proprietary genetics portfolio of premium strains and meticulously cultivating cannabis at scale since 2009. With over a decade of industry experience, they are known as a leading brand in the cannabis space and the pioneer of "designer weed." The company currently operates in California and Arizona. By virtue of its organically-developed and trusted reputation, Connected's expansion into Arizona in November 2020 has seen continuously high sales since launching.
With the additional capital, Connected will accelerate its national expansion while maintaining control over its state-of-the-art cultivation techniques. The company plans to focus on states with robust cannabis cultures and promising potential for sustained growth, such as Nevada with its entertainment and cannabis tourism and Michigan with its continued increase in sales.
"We're thrilled to bring Emerald Park Capital and Presidio View Capital into the Connected family and welcome back our long-term partners that have supported our company's mission from the very beginning," said Sam Ghods, CEO of Connected. "We are steadfast in our development of new, best-in-class genetics and our production of top-quality flower that has resulted in impressive growth and unwavering customer loyalty. That same commitment and quality that we've prided ourselves on from day one will stay with us as we enter additional states. We look forward to bringing our true product and brand to consumers in new markets — that is our highest priority every time we look at expansion."
Connected previously raised $25 million in a Series A round of funding in July 2019. Connected has won several awards for their strains and has experienced monumental 68% year-over-year growth with 75% revenue CAGR through 2021. Connected is currently EBITDA-positive.
"Connected's product quality is unmatched across the cannabis industry, as exemplified by their dedicated mass following," said Chetan Gulati, Partner of Navy Capital. "The company's success is largely due to their proprietary genetics as well as their ability to grow premium cannabis efficiently and at scale without compromising on quality. We look forward to seeing the team bring that same top-shelf quality to more U.S. markets."
"Connected is a legacy brand that's established itself as a market leader based entirely on their unique, premium cannabis strains and flower," said Joel Magerman, Managing Partner of Emerald Park Capital. "Over the last decade, Connected has built a best-in-class team across departments, from cultivation to marketing. We are eager to see what innovations and additional value the team will bring as they continue on their path to becoming a leading national brand."
Connected and its partner brand, Alien Labs, acquired by Connected in 2017, recently took home a total of five top-ten wins across the Indoor Flower and Live Resin Cartridges categories of the 2021 Emerald Cup — Northern California's premier cannabis destination and the industry's most prestigious award. Connected led the indoor flower category with their Gelonade strain taking first place while Alien Labs' Biskante placed third. Connected also recently won first place in the High Times Cannabis Cup in both the Indica and Sativa flower categories for Biscotti and Gelonade, respectively.
About Connected Cannabis Co.
Connected Cannabis Co. has been breeding, growing and selling the best cannabis in the world since 2009. Started with the mission of providing high-quality products paired with excellent customer service, Connected started as Fruitridge Health and Wellness in Sacramento. Co-founded by Caleb Counts, a master grower, the company has created a cult-like following for its celebrated strains, and its indoor flower commands the highest wholesale price in any major legal market. Connected acquired the popular brand Alien Labs in 2017. Today, Connected maintains a portfolio of proprietary top-shelf strains cultivated in state-of-the-art grow facilities in both California and Arizona and operates three stores. For more information, please visit us at www.connectedcannabisco.com.